Escheat

I learned a great deal from my past client. She called in asking for $950.00 in her escrow account. This was from a closing 6 years ago. I checked my records and found no escrow account nor did I find any evidence of one being established on her behalf. The buyers' loan came through the MHDC grant program. The HUD statement showed the seller giving her $1500 for closing costs. But still no separate escrow account for a new deck and roof ventilation system showed on the HUD. I have no way of knowing what happened. I have asked MHDC if there was a limit on how many dollars the seller could grant the buyer. Am waiting for an answer.

In the meantime, I talked with a title officer and she mentioned a rule about unclaimed property. Delving deeper I found escheat. For those of us living in the State of Missouri, this rule may be helpful. Escheat, according to Wikipedia, states "In some jurisdictions, escheat can also occur when an entity (such as a bank) holds money or property (such as an account in that bank) and the property goes unclaimed. In many jurisdictions, if the owner cannot be located, such property can be revocably escheated to the government.

In business, it is the process of turning over unclaimed or abandoned payroll checks, or stocks and shares whose owners cannot be traced, to a state authority (in the United States). Every company is required to file unclaimed property reports with state annually and to make a good-faith effort to find the owners of their dormant accounts. The escheating criteria are driven by individual state regulations."

Missouri gives an entity 5 years to turn over unclaimed property to the Secretary of State. Then the records are purged.

In my particular case, if the escrow account had been established, the unclaimed property would have been returned to the owner, in this case the seller, after 5 yrs. I should say if the owner could be found the funds would have been returned.


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