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Receipt of Check Authorizes Cashing of Check?

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Question: 
I work for a commercial real estate servicing company. We received a check from a borrower as a good faith deposit for a refinance, however, he did not give us verbal authorization to cash the check. Do we have to legally honor this request or can we move forward with cashing the check?
Answer: 

If the terms of your service are that you must have a good faith deposit in hand before proceeding with a refinancing request, you should make it crystal clear that you cannot move forward without depositing the check. If the borrower does not want you to deposit the check, you should refuse to accept it and deny the refinancing request or refuse to accept the application. Either the borrower doesn't have funds in his account to cover the check or will want to have his money back if his request is refused and doesn't think you'll refund it.

First published on BankersOnline.com 9/07/09

First published on 09/07/2009

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