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Friday, February 7, 2014

Buying a Home or Refinancing? Here’s How the "Good Funds Law" May Affect your Closing

If you are purchasing a home (or refinancing your current home) and you are required to bring money to the closing, it’s advisable to avoid surprises and additional expenses by discussing the details in advance with your closing attorney. 

As a result of recent economic turmoil, Georgia passed the "Good Funds Law" to make sure that a closing attorney has money to conduct the closing. The Good Funds Law requires that a closing attorney cannot disburse the proceeds of a closing unless he has "collected funds" in his account. "Collected funds" are defined as "funds deposited, finally settled, and credited to the settlement agent's escrow account."

Typically, this means a bank wire transfer from the purchaser or lender directly into the closing attorney's bank account.  There are four exceptions to this rule:

 (1) a cashier's check from a federally insured bank or credit union;

 (2) a check drawn on the escrow account of another attorney licensed to practice in Georgia;

 (3) a check issued by the Untied States or State of Georgia; or

 (4) a check not exceeding $5,000.

If “good funds” are not brought to a closing, it can result in costly delays and additional time and expense to all parties. This is why it is important to be in communication with your closing attorney early on in the closing process.  Good communication and planning can help you avoid costly mistakes and get you one step closer to enjoying your new home. 

For more information on this topic, email Scott Mayfield at smayfield@smithwelchlaw.com or call him at 770-358-3630. Smith, Welch, Webb and White is recognized as a premier law firm throughout the state of Georgia. We have an uncompromising commitment to serving our clients and our community. Our team of experts routinely handles a wide range of legal matters, and will provide outstanding service for you, your family or your business.

 

Any representations regarding the law in this Blog is made available for educational purposes only as well as to give you general information and a general understanding of the law, not to provide specific legal advice. By using this blog site you understand that there is no attorney client relationship between you and the Blog publisher. The Blog should not be used as a substitute for competent legal advice from a licensed professional attorney in your state.


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