Question

The fiduciary duties of an escrow agent shall include?

1) Explanation of Earnest Money Receipt contracts
2) Disclosure of defects in title and their acceptance or method of elimination
3) Telling all he or she knows to keep the principals informed
4) Holding all documents until properly directed as to their disposition
5) Favoring the person who brings the escrow business to you

Answer 1

The fiduciary duties of an escrow agent include holding documents until instructed, disclosing title defects, and keeping principals informed. They must remain neutral, without favoring any party involved in the escrow transaction.

Step-by-step explanation:

The fiduciary duties of an escrow agent are critical in the process of buying a home, where the escrow is used to ensure a neutral third party holds funds, typically for home insurance and property taxes, and releases them upon completion of certain conditions. The fiduciary duties include:

• Holding all documents until properly directed as to their disposition.
• Disclosure of defects in title and their acceptance or method of elimination.
• Keeping the principals informed, but not necessarily disclosing all information the agent knows.

It is not the duty of an escrow agent to explain contracts, as they are not legal advisors, and they must remain neutral, thus not favoring any party who brings the escrow business.