Texas · closing fundsTexas good funds rule: why the title company waits for your money to clear

In Texas, a title company, title agent, direct operation or escrow officer that holds closing money in a trust account may not disburse anything until good funds equal to all disbursements have been received and deposited (Texas Department of Insurance Procedural Rule P-27, implementing Insurance Code §2651.202). Good funds include cash and wire transfers; cashier's, certified and teller's checks drawn on an FDIC- or NCUSIF-insured institution; uncertified items under $1,500 – checks, traveler's checks, money orders – as long as several items aren't used to get around the limit; uncertified items of $1,500 or more only once the bank has collected them; State of Texas warrants; U.S. Treasury checks; checks from Texas cities and counties; and lender checks covered by an Immediately Available Funds agreement (Form T-37 or T-37A). Funds are 'received and deposited' when they're in the trustee's possession, recorded on its books with the actual date, and delivered to the bank within three business days; a wire counts when the bank notifies the trustee it arrived. Partial disbursements before good funds arrive aren't allowed, though overpaid money that won't be part of the deal can be refunded at or before settlement. The trust account must be at a bank located in Texas, and even good funds don't have to be disbursed if reasonable business judgment says they may not be collected.