Professional Designations (PD)

Professional Designations

The California Escrow Association
Knowledge Accreditation Program

Why it should matter to all of us

When I sat down to write about the California Escrow Association (CEA),(the article is accessed here) I dedicated only a small section to a very important role it plays for the escrow industry, that of its knowledge accreditation program – the Professional Designations (PD) program. I would like to take this opportunity to expound on it, so that those who read this are made aware of how important this program actually is.

When a person goes through courses and passes tests and exams to achieve a certain level of education there is usually some sort of public accreditation to proclaim this fact. We all have high school diplomas, college degrees and, in the higher education, the ability to put this credentialing behind our name – M.A., M.D., Ph.D.

The main directive of CEA is the education of its members. This education comes in many forms, through basic on-the-job training, peer-to-peer education, seminars, and the yearly educational Conference. There are no escrow degrees offered in colleges and you don’t need a higher learning degree to become an Escrow Officer. But how does a person distinguish themselves in this field? Towards this end CEA developed the professional designation program which would credential those who used this accumulated expertise to pass certain tests.

It is my privilege to write this article so that the public is made aware that when you meet an Escrow Officer with the credentials behind their name, you are meeting someone who has put time in this industry, accumulated knowledge and expertise, and, more importantly, was able to commit to taking that additional step of using this knowledge to pass a barrage of tests. This achievement deserves to be understood and commemorated. Only then will the public understand that they are working with a person who has taken steps to improve themselves over and beyond what is required at the job. This is no longer a job to them. This is their career.

Through the years the designations became goals for me to achieve, no matter what. How do I show potential clients who have not worked with me that I know what I am doing? In my younger years it was important to be credible. Now, even after 40 years in the industry, I still need to prove my credibility. Not only would achieving these goals give me great personal satisfaction, the plaque that I would receive and hang on my wall would proclaim to all that I do know what I am doing.

The program started out in 1969 with two certifications, one was the mid-level Certified Escrow Officer (CEO) and the other the highest level Certified Senior Escrow Officer (CSEO). The 3 part exam was designed, given and graded by those escrow professionals who had already achieved the highest level CSEO designation. With the advance of technology, the methods of taking the exams are undergoing a change. Physical appearance at a testing location may change so that most of it may be taken online. However, the basic structure and reasoning for each part remains the same.

Part One – The problem section.We will give you an escrow file with all the pertinent information and instructions in it. Read the instructions, prepare all the documents and balance it to as close to the penny as possible.” This is comparable to opening, balancing, preparing documents and closing a transaction, all within a matter of 3 hours. Easier said than done!

The role that we play in a transaction centers around being a neutral third party who follows instructions. How well do we do that without putting our own ideas, comments or spin on it? We are also in charge of other people’s moneys, so it is important that we calculate and disburse the funds entrusted to us correctly and to the penny. Finally, we are responsible for the preparation of documents that memorializes instructions, transfers ownership and sets out private money loans. This means that there is a good amount of document preparation in our work. The problem section tests us in these 3 areas.

I took the Certified Escrow Officer (CEO) test first and I don’t mind telling you that it took me two tries to pass this first part of the exam. Today we are used to our computers doing the calculations for us. Enter this number here, click this button there and voila! The answer comes out. But at the test site we have no computer on hand, we are calculating everything manually, we need to think the question through. Did we follow the instructions about paying the costs of the transaction? How about the calculation of the payoff? If we do one proration or calculation incorrectly or forget to account for one item, the end total will be incorrect and we may have failed.

The preparation of documents portion is the easier part of this first section, but it is still very important. We have to know where on the forms to type in what information. Prepare a Deed? Prepare a Deed of Trust? The general public may not know the difference between the two documents, but we have to, and more important, in order for the documents to be valid and acceptable in the court of law, they have to be prepared correctly. Incorrectly prepared documents would have huge repercussions for the persons benefiting from them.

When I took the CEO test in 1988, our testing site was a room in one of the nearby colleges where there were typewriters we could use to complete the documents. Amazing to think of it now. I always look back on that exam fondly because it changed about a decade later when typewriters were a thing of the past, but computers could not be brought into the exam site and the documents had to be re-designed to multiple choice and a scantron. The answers were there; you just had to pick the right one. Not quite the same thing as coming up with the correct answer without help. Oh well. Times change and we adapt. I am proud to say I was one of the old timers. However, it was quite nerve wracking when you realize you are still struggling on the first portion of the test using the calculator and another person beside you was already at the typewriter typing the documents for the second part of the test. Talk about pressure!

Part Two – The oral exam. Many look on this part of the exam in dread as it is a face-to-face question and answer session. The candidate faces two or three proctors who would ask questions on the practice of escrow. The proctors would be looking for how well the candidate understands and responds to the technical question, how well it is communicated, and how credible and professional the candidate is through the interview. Questions cover all areas. For instance – when can a power of attorney be used and when is it not appropriate? Or what is the proper process of handling a dispute on commission? Or what is the Usury Law? Why is this part of the test important, you may ask? Well, aside from the obvious – making sure we have the technical knowledge that is necessary – much of our communication is with our customers.  With an industry given certification attached to our name we are going to be held to a higher level of accountability, credibility and professionalism.

On an average 6 questions  are asked. Less if the candidate comes across well in the beginning, more if they do not. The proctors want to pass the candidate and will give more opportunities if it will bring the grade higher. I am not going to say this portion of the test is easy; it is not. Some find it the most difficult. We are nervous, it’s me against two or three, and these two or three are peers who have already achieved the highest certification and are usually people we look up to. So, no stress, not at all. I have to admit that as a proctor these last 20 some years, I have failed candidates a number of times. I don’t like to, but if they really can’t convince me that they are worthy of the certification, I will not pass them.

Part Three – The True/False and Multiple Choice section. 3 hours and 300 hundred questions in this section tests the candidate on escrow knowledge and math calculation. Again, questions covers all areas, including knowledge on title policies and endorsements, easements, mechanic liens, legal entities, a variety of subjects that might not be used on a daily basis but is part and parcel of what is considered the escrow book of knowledge.

Math calculations may sound easy when there is a calculator but it is not the actual calculation that is tested but the concept behind it. Tax prorations, transfer tax payments, calculation of rent prorations, calculation of payoff amounts, we do these daily but how well do we understand the concept behind the calculations and, more important, do we understand who gets the credit or the debit? At the end of our transactions we need to show the Seller how much he will receive in net proceeds. We need to advise the Buyer how much funds are needed for the closing. If the amounts to be prorated are small, the adjustments may be minor, but when you have taxes or rents that are in the 5 digit amounts, one day’s differential can be thousands of dollars. The clients rely on us to be correct but given that not everything is paid on a standard calendar month or year, it can be confusing. Is it a credit to Seller from closing date to paid date? Or is it a debit to Buyer from paid date to closing date? What dates do the paid period encompass? Who owns the property during that time?

It is important that the Escrow Officer retains a clear mind when they are balancing a file to close so part three tests the acuity and technical knowledge. To me, passing this portion of the test was the hardest. In addition, if we are taking the whole exam in one day, by the time we get to part three in the afternoon, our brain is mush.

CEA designed the 3 part exam so that each part can be taken and passed separately. A candidate who does not pass one of the parts, has the opportunity to take that part again any number of times within one and half years after the initial exam was started.

CEA went on to offer tests for practitioners of specialty escrows – the Certified Bulk Sale Specialist (CBSS) exam, the Certified Mobilehome Specialist (CMHS) exam, and the Certified Escrow Instructor (CEI) exam for those interested in teaching our peers. Entry level escrow practitioners can also take the first level Certified Escrow Technician (CET) exam.

To take these tests the candidates have to be a member of CEA and there are general time in industry and position requirements. Achieving the certification is a huge accomplishment but it does not stop there. The Professional Designation (PD) holder has to remember that there are continuing education requirements to keep up. The program requires that the PD holder amass 48 units of continuing education every 4 years. Attendance at approved education events is the standard way to satisfy this process. Given how difficult the professional designation is to achieve, it is rare that a holder does not keep up with their continuing education. Letting it lapse means that all the hours of hard work and dedication will be for nothing as the certification will then be considered void and the escrow professional is no longer allowed to use the accreditation behind their name.

For those who have read through this article, I hope that I was able to impress on you the difficulty of getting the certification and once obtained, the importance of it in the career of the escrow professional. Why would it matter to you? You are the recipient of their expertise.

For those escrow professionals who have read through this article and have gotten to this point, perhaps you are ready to get your own certification. There is much more information on the actual tests and the types of continuing education classes that qualify on CEA’s website at this link.  There are also sample tests and an FAQ area that might be helpful.

For the benefit of my regional association I shot a video to describe the program and provide tips for a general course of study.

Having my professional designations sets me apart in an industry full of seasoned officers and which is being supplemented daily by a new generation of professionals. I am very proud of my certifications. Each one in itself is an accomplishment! I encourage every escrow professional to strive, achieve and prove to yourself that you can do it. Give yourself the edge over the competition. It will matter to you, to your clients, and ultimately, it will matter to the industry which will be brought to a higher level of professionalism.


* Notation: The SASIP credentials belong to the American Escrow Association, which also has a National Certification Program. Passing their test accredits me as a “Senior American Settlement Industry Professional”