38-WA-03 Washington Escrow Practice Exam | 50 Q&A |
Detailed Explanations
Subject/Course: Real Estate, Escrow Certification, Finance,
Licensing Exams
Tags: Washington Escrow, WA DFI, Escrow License, 38-WA-03,
Practice Test, RCW 18.44, Escrow Trust Account, Title Insurance
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1. According to RCW 18.44, who must obtain an escrow agent
license in Washington?
A) Real estate brokers handling their own transactions
B) Any person engaged in the business of receiving escrow
funds for compensation
C) Bank employees processing mortgage payments
D) Homeowners selling their own property
Correct Answer: B) Any person engaged in the business of
receiving escrow funds for compensation
Explanation: RCW 18.44.011 requires licensure for anyone
who, for compensation, engages in the business of receiving
escrows. There are specific exemptions for attorneys, financial
institutions, and real estate brokers in certain circumstances.
,2. The "Bulk Funds Rule" (WAC 208-680-410) prohibits an
escrow agent from:
A) Holding funds for more than 30 days
B) Disbursing against uncollected funds
C) Investing escrow funds in securities
D) Charging fees for wire transfers
Correct Answer: B) Disbursing against uncollected funds
Explanation: This critical rule requires all funds (especially
checks) to clear the payer's bank and be irrevocably credited to
the trust account before any disbursements related to that
transaction can be made.
3. How often must an escrow agent reconcile their trust
account?
A) Daily
B) Weekly
C) Monthly
D) Quarterly
Correct Answer: C) Monthly
Explanation: WAC 208-680-410(5) requires monthly
reconciliation comparing bank statements, checkbook balances,
and individual client ledger balances.
4. What is the minimum surety bond requirement for an
independent escrow agent in Washington?
A) $10,000
B) $25,000
, C) $50,000
D) $100,000
Correct Answer: C) $50,000
Explanation: RCW 18.44.201 mandates a $50,000 surety bond
for independent escrow agents to ensure financial
responsibility.
5. An escrow agent receives funds on Friday afternoon. When
must they be deposited into the trust account?
A) By Monday evening
B) By the end of the next banking day
C) Within 72 hours
D) Before closing
Correct Answer: B) By the end of the next banking day
Explanation: WAC 208-680-410(2) requires deposit by the close
of business on the next banking day following receipt.
6. Which document does a Washington escrow agent typically
prepare to transfer title?
A) Promissory Note
B) Deed of Trust
C) Statutory Warranty Deed
D) Loan Estimate
Correct Answer: C) Statutory Warranty Deed
Explanation: The escrow agent prepares the deed based on
instructions. RCW 64.04.040 governs the Statutory Warranty
Deed, which includes specific covenants.
Detailed Explanations
Subject/Course: Real Estate, Escrow Certification, Finance,
Licensing Exams
Tags: Washington Escrow, WA DFI, Escrow License, 38-WA-03,
Practice Test, RCW 18.44, Escrow Trust Account, Title Insurance
Docsity | Premium Study Resources
Access Thousands of Verified Materials – Find practice exams,
study guides, and lecture notes for your exact course or
certification. Join millions of successful students on Docsity.
1. According to RCW 18.44, who must obtain an escrow agent
license in Washington?
A) Real estate brokers handling their own transactions
B) Any person engaged in the business of receiving escrow
funds for compensation
C) Bank employees processing mortgage payments
D) Homeowners selling their own property
Correct Answer: B) Any person engaged in the business of
receiving escrow funds for compensation
Explanation: RCW 18.44.011 requires licensure for anyone
who, for compensation, engages in the business of receiving
escrows. There are specific exemptions for attorneys, financial
institutions, and real estate brokers in certain circumstances.
,2. The "Bulk Funds Rule" (WAC 208-680-410) prohibits an
escrow agent from:
A) Holding funds for more than 30 days
B) Disbursing against uncollected funds
C) Investing escrow funds in securities
D) Charging fees for wire transfers
Correct Answer: B) Disbursing against uncollected funds
Explanation: This critical rule requires all funds (especially
checks) to clear the payer's bank and be irrevocably credited to
the trust account before any disbursements related to that
transaction can be made.
3. How often must an escrow agent reconcile their trust
account?
A) Daily
B) Weekly
C) Monthly
D) Quarterly
Correct Answer: C) Monthly
Explanation: WAC 208-680-410(5) requires monthly
reconciliation comparing bank statements, checkbook balances,
and individual client ledger balances.
4. What is the minimum surety bond requirement for an
independent escrow agent in Washington?
A) $10,000
B) $25,000
, C) $50,000
D) $100,000
Correct Answer: C) $50,000
Explanation: RCW 18.44.201 mandates a $50,000 surety bond
for independent escrow agents to ensure financial
responsibility.
5. An escrow agent receives funds on Friday afternoon. When
must they be deposited into the trust account?
A) By Monday evening
B) By the end of the next banking day
C) Within 72 hours
D) Before closing
Correct Answer: B) By the end of the next banking day
Explanation: WAC 208-680-410(2) requires deposit by the close
of business on the next banking day following receipt.
6. Which document does a Washington escrow agent typically
prepare to transfer title?
A) Promissory Note
B) Deed of Trust
C) Statutory Warranty Deed
D) Loan Estimate
Correct Answer: C) Statutory Warranty Deed
Explanation: The escrow agent prepares the deed based on
instructions. RCW 64.04.040 governs the Statutory Warranty
Deed, which includes specific covenants.
