Realty Times - How To Keep Title And Escrow Companies Out Of Your Wallet

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How To Keep Title And Escrow Companies Out Of Your Wallet

by Broderick Perkins

Whether or not California wins the suit against title and escrow companies, the fees they levy are so numerous consumers must be ever vigilant about scrutinizing them.

A home purchase is the most expensive purchase ever for most people and with the industry's latest suit, you can't be too demanding about making sure you get what you pay for.

Title insurance and escrow companies owe California home owners hundreds of millions of dollars the industry appropriated by charging them fees for services never provided and by failing to return money placed in escrow, according to a lawsuit filed May 21.

The suit alleges some title and escrow companies seem to think otherwise, but it is, however, your money.

Here's how to keep title and escrow companies from over charging you.

Compare the costs of different escrow and title companies before agreeing to use one.

Be sure when you complete an application for a loan you get settlement costs and good faith estimate information. RESPA requires the lender or mortgage broker is to deliver these documents to you within three days of receiving the application.

Remember, the good faith estimate is only an estimate or range of charges. For example, the lender may not know the costs for a settlement agent that you choose, or the exact amount that will be collected for an escrow account for taxes and insurance.

To avoid surprises, let the lender and settlement agent (escrow or title company) know that you will want to see the settlement statement one day in advance and that you won't be rushed on closing day.

Compare the good faith estimate with the settlement statement, contact the lender as well as the title/escrow company, demand that they explain any differences. Ask the lender, title or escrow companies to waive any fees that were not listed in the good-faith estimate.

On closing day, come prepared with plenty of time, pencil, paper, a calculator, and an inquisitive, demanding mind.

Do not hesitate to question any amount that you do not understand and sign nothing until you understand each charge.

Some consumer advocates suggest demanding a receipt for each and every charge on the settlement statement, but be prepared to delay closing to get them.

Complaints

If you think you've been wronged by the lender, title or escrow company, file a complaint with the appropriate agency.

In California, the Department of Corporations at (800) 347-6995, regulates escrow companies and the Department of Insurance, at (800) 927-4357, oversees title insurance firms.

Call the Escrow Institute of California toll-free, at (800) 337-2769 for help during the escrow process.

Contact: Controller of the State of California - Kathleen Connell
300 Capitol Mall, Suite 1850
Sacramento, California 95814
(916) 445-2636
cogen@vmmail.teale.ca.gov

Note: Pease be sure to include your street address or other U.S. Postal Service mailing address when sending electronic mail to the State Controller's Office. Not all requests may be answered via the Internet. Providing your U.S. Postal Service address will help the State Controller's Office ensure that you receive full assistance with your inquiry.

See Part I: Latest Industry Suit Raises Red Flag For Consumers, Dire Questions For Industry

Published: May 25, 1999

Use of this article without permission is a violation of federal copyright laws.

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