Bulletin: MA000004

Dear Associates:

Please be advised that a happy day has dawned on the conveyancing community and the title insurance industry: the "Good Funds" statute has passed! This is such a critical piece of legislation that we are sure you will hear more of it in the coming months. However, we thought it important to make you aware of it well in advance of its effective date so that you can discuss it with your lenders and prepare your staff for any procedural changes in escrow funding and reconciliation that may be necessary because of the "Good Funds" mandate.

For your reference, a copy of the new statute is enclosed with this bulletin. Please note that the bill was signed by the Governor on December 27, 1994, without an emergency preamble. Accordingly, the statute becomes effective ninety days from the date of signing, i.e., March 27, 1995. The statute amends M.G.L. Chapter 183 by adding a new section 63B.

Please note, also, that Stewart Title considers it to be our agent's responsibility to verify compliance with the statutory funding mandate prior to disbursements and the recording of the mortgage documents to be insured under Stewart Title insurance policies. As it has always been Stewart Title's policy that closing settlement disbursements should only be based upon verified receipt of "good funds", the statutory mandate may not require significant changes to your current practice.

If you have any questions regarding the effect of the "Good Funds" statute or Stewart Title's position regarding your responsibilities in assuming compliance with same, feel free to contact the Boston Office Legal Department.