A title company is in legal hot water again, and this time the suit includes federal charges that demand restitution in the billions.

Hot on the heels of the California's multi-million dollar suit against the title and escrow industry in that state , a San Francisco law firm's suit filed June 3 in U.S. District Court alleges that Fidelity National, Inc. and its subsidiaries bilked Californian home owners out of as much as $500 million a day.

Seeking damages that could result in billions of dollars to compensate the company's customers, the action further underscores consumers' need to scrutinize title and escrow fees and services.

The federal class action suit alleges Fidelity, Fidelity National Title Insurance Co., Fidelity Asset Management Inc. and Rocky Mountain Support Services violated the Real Estate Settlement Procedures Act (RESPA) nationwide, not just in California.

Fidelity and its subsidiaries accepted secret interest on customer escrow accounts and collected reconveyance fees for services that were never performed for home owners in the process of selling or refinancing their homes, the suit charges.

"Given the nationwide explosion of home sales and refinancing in the past few years, it is crucial that these consumers of Fidelity's services also have their legal rights safeguarded," said William B. Hirsch of Lieff, Cabraser, Heimann & Bernstein, LLP, the law firm representing the class action.

On May 19, in a suit filed in Sacramento's Superior Court, California's Controller Kathleen Connell said Californian home buyers who purchased homes since 1970 had been bilked out of hundreds of millions of dollars the industry allegedly appropriated by charging them fees for services never provided and by failing to return money placed in escrow.

Connell's suit also named Fidelity National Title Insurance Co. along with Spring Mountain Escrow Corp. and West Coast Escrow Co., but seeks damages and penalties against 200 title insurance and escrow companies that have conducted business in the state.

In yet another suit against the industry, San Francisco District Attorney Terence Hallinan and City Attorney Louise Renne sued Old Republic Title Co. for allegedly bilking California real estate consumers out of $50 million in title and escrow fees since the 1970s.

Filed in July 1998, the case went to mediation in late April, 1999, according to Clarence Johnson, a Hallinan spokesman.

When Connell's suit was filed, RealtyTimes.com raised the possibility of federal charges, because escrow and title services and fees are governed by federal law.

Connell's suit doesn't include federal charges, but the latest suit does.

"RESPA offers a powerful weapon against misconduct in the real estate industry because the statute permits treble damages," Hirsch said.

RESPA specifically prohibits settlement-related charges for services that are not performed. RESPA prohibits kickbacks and referral fees that unnecessarily increase the costs of certain settlement services. It also requires that borrowers receive disclosures at various times in the escrow process, among a host of other requirements associated with settlement costs, including title and escrow fees.

"We believe that the amount of secret interest obtained by escrow and title insurance industry may be substantially higher than revealed in the controller's suit. The federal class action alleges that in California alone, Fidelity and its subsidiaries in recent years obtained interest on escrow funds that fluctuated on a daily basis between a range of $25 million to half a billion dollars, and sometimes higher. This interest should have been disclosed and returned to Fidelity's customers," Hirsch added.

While California's suit focuses on alleged wrong doings against home buyers, the federal class action is designed to assist home owners who sold or refinanced their property, Hirsch said.

Hirsch's law firm specializes in representing plaintiffs in class actions involving dangerous or defective products, consumer fraud, employment discrimination, environmental torts, investment fraud and antitrust violations.

For more information about the latest Fidelity suit, contact Stephen H. Cassidy by phone, (415) 956-1000; fax, (415) 956-1008; e-mail, scassidy@lchb.com

For assitance with title and escrow costs, read RealtyTimes.com's "How To Keep Title And Escrow Companies Out Of Your Wallet."

RESPA details are available at http://www.hud.gov/fha/sfh/res/respa_hm.html or (415) 436-6550."

Call the state controller's office at (800) 992-4647 only if you believe you are owed money from any source; http://www.sco.ca.gov.