Wires Gone Wrong

Wires: love them or hate them, but for now, it’s how we do business.

And sometimes, they get messed up.

One of the questions that frequently comes up involves returned wires. The problem occurs both ways, but let’s examine the outgoing wire dilemma.

As we all know, lenders and title companies regularly reject and return wires, making our lives, as escrow practitioners, more stressful (if that’s possible). Wrong amount, shouldn’t have been bundled with other fees, wrong exact payee, or just the wrong song playing on their Spotify playlist. For whatever reason, a wire you sent out, effectively closing a file and freeing you to move on to the next nightmare on your desk, is back. Worse, it’s already been posted, and sometimes, already reconciled. What do you do?

“Books” speaking, there are usually two remedies to this unfortunate situation. First, if the wire has been immediately returned (i.e., never accepted by the payee = slammed door), you should void or cancel the wire in your escrow accounting program. Once voided, the file will show a credit balance, ready to be re-disbursed. Easy-peasy.

Sometimes, the wire sits for a bit at the original payee’s bank. There may be some question about its appropriateness, or the payee just may be, ahem, out to lunch. When it reappears in your account, you’ve already dashed that transaction from your mind. Now, here it is, mucking up your day. You go to cancel/void the wire, but you find you can’t; the software won’t let you. That evil, grinning message on the screen says the world will end if you try to cancel a transaction that’s already been reconciled.

Before you reach for the Xanax, here’s an idea: draw a receipt. Outsmart that over-protective program and just welcome that money back into your file, where you can now send it out again – this time with hopes of acceptance.

But here’s the important part; when you issue that receipt, be sure to lay blame where blame is due. When completing the payor information, don’t forget to point the finger. “XYZ LENDER FOR REJECTED WIRE DATED 11-01-2023.” In other words, make it so that any auditor won’t have to ask you why you drew a receipt.

Ta da! Now back to actual income-producing activities.