You may know that an escrow company is responsible for the purchase and sale of a property. What you might not know is sub-escrow may be required.
A sub-escrow is a requirement of the funding lender (new lender). In some cases, the lender may be processing their escrow with a private company. This is so that the lender can be confident that the company receiving the funds has adequate Errors and Omission coverage in the event that there is any insolvency. Typically, the full escrow agent will be notified last minute that the lender requires a sub-escrow. From here, the sub-escrow is set up with the title company that is issuing the title insurance policy.