Which action is illegal for someone handling escrow funds?

Co-mingling escrow funds with personal funds is illegal because it undermines the integrity and protection of the escrow account. Escrow accounts are designed to hold funds securely for the benefit of one or more parties in a transaction until the terms of the contract are fulfilled. When escrow funds are mixed with personal funds, it becomes impossible to accurately account for the funds that belong to the parties in the transaction, which can lead to misappropriation and misuse of those funds.

Maintaining the clear separation of escrow funds from personal or business funds is crucial for transparency, accountability, and compliance with legal and ethical standards in real estate transactions. This practice ensures that all parties can trust that their funds are being managed in accordance with the contract and applicable laws.