ANNAPOLIS -- Maryland title companies came one important step closer yesterday to losing the interest they earn on client escrow accounts, as a House committee approved a bill to encourage affordable housing.
The Maryland Affordable Housing Trust would be established under a measure that the House Ways and Means Committee passed by a 2-to-1 ratio yesterday. Funding for the trust would come from the interest title companies earn when they hold clients' money in escrow.
The housing trust would award money to buy, build or preserve affordable housing, and would help other non-profit organizations that support affordable housing. The state Department of Fiscal Services estimated the title interest could generate $1.2 million for low-income housing.
For about five years, title companies have defeated various legislative efforts to make them donate their client escrow interest -- when it amounts to less than $50 per transaction -- to the state. Interest exceeding $50 is supposed to be returned to the client.
The Senate consistently has voted to create a state program to collect interest on title accounts and already has approved the measure this year. Law firms, which compete with title companies but must donate their client escrow interest to legal programs for the poor, have been the strongest supporters of the proposed title company program.
Although the bill has passed the full House in previous years, it has gotten hung up in the end-of-the-session time squeeze, according to title company lobbyists.
A House vote on the bill has not been scheduled.
"It's not over till it's over, and we're not giving up," said Michael Gisriel, a lobbyist for the Maryland Land Title Association.