ANNAPOLIS -- Title companies again narrowly avoided yesterday being forced to give up the interest they earn on their clients' escrow accounts.
By a 12-10 vote, the House Ways and Means Committee agreed not to use title company interest as the source of funding for the proposed Maryland Affordable Housing Trust, a fund that would help pay for affordable housing in Maryland.
For years, title companies have fought a turf battle with law firms over the interest earned on client escrow accounts.
Law firms are required by legal ethics and state law to donate the interest -- when it amounts to $50 or less per client -- to the Maryland Legal Services Corp., which funds services for the poor. But lawyers who own title companies are not bound by that law or by ethics code.
This year's threat to title companies came in the form of a bill to create the affordable housing trust. Title companies have argued that taking their escrow interest would force them to raise housing settlement costs.