First American Title recently agreed to give back $24 million to consumers nationwide while denying any wrongdoing after it was charged in Colorado and elsewhere with alleged kickbacks to real estate agents, lenders, and developers.

Chicago Title has agreed to pay $6.2 million in civil penalties to the U.S. Treasury and the Texas Department of Insurance, it also agreed to clean up settlement service practices after federal investigators found that settlement statements failed to accurately reflect the actual settlement costs for home loans and that the company violated federal anti-kickback provisions.

Other title insurance companies voluntarily stopped questionable practices and settlements after regulators in Alaska, California, Colorado, Florida, Minnesota and Washington looked into alleged kickback practices involving the title companies, real estate agents, lenders and developers.

Deja vu.

The title industry is in hot water again -- for at least the third time in the last half decade -- and the investigations and settlements underscore the continued diligence necessary from consumers who don't want to pay more than necessary for title services.

Title companies are hired, in part, to issue title insurance protection for home buyers and lenders. No matter the policy, the home buyer or seller typically pays for the coverage, after the company has investigated a title to make sure it is clear of any encumbrances, such as liens or judgments; forgeries or fraud and any other title anomalies.

Also, when you "open escrow" and later "close escrow" when the deal (home purchase or refinance) is done, you typically do so with a title or escrow company.

Such companies act as escrow agents -- the neutral third party through which is funneled the paperwork, money, transaction instructions, and other details of a home purchase or mortgage refinance. The companies, hold onto, and then exchange, disburse and transfer deeds, other documents, and monies related to the transaction.

The disbursements pay off existing loans and the title and escrow companies record deeds, prorate property tax payments and interest as it helps with the transaction's other transfer details.

Most of the monies associated with the home purchase are funneled through the escrow account, including the buyer's deposit, money for the escrow account itself, as well as related services, title insurance and title search fees, the purchase or refinance mortgage money and associated fees, the real estate agent's commission, recording fees, filing fees, transfer fees, notary fees, courier fees and a host of other fees -- some that recent law enforcement action have proven are at least questionable and, in some cases, illegal.

All these costs become "settlement costs" recorded on the U.S. Department of Housing and Urban Development's HUD-1 "Settlement Statement" or a reasonable facsimile, which eventually discloses all of a housing transaction's costs for both the buyer and the seller.

If you want to pay title and escrow companies only what they are due, experts suggest following these guidelines.

Educate yourself. The title industry's American Land Title Association provides consumer information, but if you seek more independent insight, consider purchasing Sandy Gadow's "Your Real Estate Closing" (McGraw Hill $19.95) book, a model guide to title, escrow, and other closing issues. Gadow's top-notch partner web site EscrowHelp.com is also loaded with insight.

Before hiring a title or escrow company, or escrow attorney, obtain several referrals from those you trust, family, friends, co-workers, real estate agents and others who've recently closed a satisfactory escrow.

Ask for a referral to the title or escrow officer, not the company. The officer should be familiar with the type of home you are selling, especially if it's a condo or other multiplex home, an older historic home or other special house.

The escrow office should be conveniently located or able to tap branches near you. Saving time saves money.

Consider a professional who is patient, exacting, and willing to give you the time and information you need to understand escrow.

Compare the costs of different escrow and title companies before agreeing to use one. Fees can, and do vary widely. Ask for all escrow costs from the title insurance company, and search the escrow service fees for all the little so-called "garbage fees" that crop up in escrow.

Be aware of discounts. Refinance-related discounts may be available when the loan being refinanced is relatively new, or only a few years old.

Be sure when you complete an application for a loan you get settlement costs and good faith estimate information. Federal law requires that the lender or mortgage broker deliver these documents to you within three days of receiving the application. Costs on the good faith estimate and final settlement sheet are not only title insurance and escrow related fees, but a host of other costs for the mortgage, insurance, and taxes among others.

Remember, the good faith estimate is only an estimate. For example, the lender may not know the costs for an escrow agent or title company that you use, or the exact amount that will be collected for title insurance and other costs not levied by the lender.

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 and, if necessary, 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. Learn about in advance and watch out for something called a "yield spread premium" which is a broker's fee that doesn't have to show up until closing.

On closing day, come prepared with plenty of time, pencil, paper, a calculator, and an inquisitive, demanding mind. You are allowed to have your representative -- a real estate agent, mortgage counselor, or other professional -- attend closing with you. If a real estate agent is involved in the deal, he or she should accompany you. It's one of the services their commission provides. It's also their job to see that the deal closes in a satisfactory manner.

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

Hard nosed consumer advocates suggest demanding a receipt for each and every charge on the settlement statement, but be prepared for resistance (title companies argue the settlement sheet is the receipt) and be prepared to delay closing to get them. Ask for a waiver of any fee not accompanied by a receipt or which can't be explained to your satisfaction.

Don't be married to any real estate deal until you are thoroughly satisfied and have finally signed all the papers. Be prepared to walk from the table. In real estate, everything is negotiable.

Published: March 3, 2005

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

Broderick Perkins parlayed a career in old-school journalism into a contemporary digital news service that really hits home. The award-winning consumer journalist, originally from Wilmington, DE, is founder, publisher and executive editor of the bootstrap DeadlineNews Group, a Silicon Valley-based editorial content and consulting service specializing in residential real estate, consumer news and related editorial consulting services. The DeadlineNews Group includes the website, DeadlineNews.com, offering real estate editorial content and consulting services, and its back shop, the Deadline Newsroom, an open house on news that really hits home. Perkins obtained his formal journalism education from University of Delaware and a journalism boot camp, the Institute of Journalism Education at the University of California-Berkeley. He went on to 20 years of service as a daily newspaper journalist at the Wilmington, DE News Journal and San Jose, CA Mercury News. Perkins covered housing on the San Jose Mercury News reporting team which earned a General News Reporting Pulitzer Prize in 1989 for coverage of the Loma Prieta earthquake. He has also produced real estate, consumer and small business content for the Wall Street Journal, Los Angeles Times, RealtyTimes.com, Nolo.com, Better Homes and Gardens, the National Association of Realtors, Homestore/Move and Intuit/Quicken among more than three dozen publications. In addition to managing the DeadlineNews Group, Perkins most recently served as chief editorial consultant for Nolo's Essential Guide To Buying Your First Home, Nolo, and writes real estate television scripts for RealtyTimes.com.