Disbursements Guide

How Disbursements Work

A disbursement bundles together:

• Pay Ins — specify the source account funds are drawn from
• Pay Outs — specify the recipients and how each transfer is routed

The total amount across all Pay Ins must equal the total across all Pay Outs before the disbursement can be verified and sent. This amount-matching check is enforced automatically.

Supported Payment Rails

Disbursement Lifecycle

Every disbursement moves through the following states:

Pay Out Transfer Statuses

Each Pay Out also has its own transfer status that updates as the payment progresses through the network:

Creating a Disbursement

1. Start the Disbursement

In the portal, go to Disbursements → New Disbursement and select:

• The branch the disbursement is being created under
• The requesting user — the person initiating the payment
• The approving user — required if your company uses Two Party Approval, or if the amount exceeds your Single Party limit

2. Add a Pay In

A Pay In defines the source account and total amount being drawn down. For most title agency closings this is a reverse wire from your escrow or IOLTA account into the DirecFunds holding account. Provide:

• The source bank account — your escrow/IOLTA account on file
• The target account — receiving account details for the draw-down
• The payment rail — Wire is standard for reverse-wire draw-downs
• The total amount to be drawn

3. Add Pay Outs

Each Pay Out represents one transfer to a specific recipient. Add a Pay Out for each party being paid at closing — for example:

• Loan payoff to the lender
• Seller proceeds to the seller's bank
• Realtor commission to the listing agent
• Title agency commission

For each Pay Out you will need:

• Payment rail — Wire, ACH, Same Day ACH, or Instant Payment
• Amount
• Transaction purpose — Loan Payoff, Seller Proceeds, Realtor Commission, Funds to Close, Earnest Money, Closing Related Fees, Retainer, Title Agency Commission, or Other
• Target account — recipient's bank name, account number, routing number, and address
• Recipient details — name, address, and optionally date of birth, phone, email, and TIN

Verifying a Disbursement

Once all Pay Ins and Pay Outs are added, the disbursement must be verified before it can be sent. Verification confirms:

• Pay In and Pay Out amounts match exactly
• All recipient and account details pass preflight checks
• The disbursement meets the company's approval strategy requirements

For Two Party Approval, verification requires the approving user to review and sign off. The system enforces that the requester and approver are different users — one person cannot both create and approve the same disbursement.

If verification finds a problem, the disbursement will show RequiresInconclusiveOverride. An authorized user can review the issue and either override it or reject the disbursement.

Sending a Disbursement

After a disbursement is verified, click Send in the portal to submit it for processing. The status moves to Processing and the disbursement cannot be edited. Funds begin moving through the payment network according to the rail selected for each Pay Out.

Funds Flow Reference

Consumer Funds to Close

When a consumer is funding a closing digitally:

1. The closing agent creates the disbursement and invites the consumer via the DirecFunds portal.
2. The consumer receives a link, logs in to the DirecFunds Consumer Portal, and enters their bank account details.
3. DirecFunds verifies the consumer's account information.
4. Funds move from the consumer's account to the Lender FBO account via Same Day ACH (1 business day).
5. Funds move from the Lender FBO account to the Title Agent's Escrow/IOLTA account via Wire.
6. If closing is approved, the file proceeds. If declined, funds are returned to the consumer via Wire.

B2B Mortgage Loan Payoff Wire

For post-close disbursements from escrow:

1. The closing agent specifies draw-down accounts, amounts, and wire instructions in the portal.
2. The approver reviews all instructions before anything moves.
3. A reverse wire draws funds from the ODFI Escrow/IOLTA account to the DirecFunds holding account.
4. DirecFunds verifies destination accounts and runs fraud prevention checks.
5. Wires are sent to each destination — loan payoff, seller proceeds, agents, and others.
6. If verification fails at any point, funds are returned to the escrow/IOLTA account.

B2B Mortgage Loan Payoff Wire (Lender Partnership)

When a lender FBO account is used as an intermediary:

1. The closing agent specifies draw-down accounts, amounts, and wire instructions.
2. The approver reviews all prior instructions.
3. A reverse wire draws funds from the ODFI Escrow/IOLTA account to the Lender FBO Account.
4. DirecFunds verifies destination accounts and runs fraud prevention checks.
5. Wires are sent from the Lender FBO account to each payoff destination.
6. If verification fails at any point, funds are returned to the escrow/IOLTA account.

Common Questions