Even if firm closes, escrow should be safe

MAILBAG

May 05, 2002

Dear Mr. Azrael:

I sold a property in Baltimore on Dec. 4, 1998. The title company handling the settlement was All Maryland Title Inc., then located in Towson.

At settlement, the ground rent owner was not found; therefore, the settlement company advised me it would hold three years' ground rent ($270) in escrow, and I was to contact the firm after three years to find if the owner had been found and paid, or to be reimbursed the total with interest.

I attempted to contact the company in December 2001 and found it has gone out of business. Please advise me of the procedure to check further into such a matter.

Maurice Dezurn

Baltimore

Dear Mr. Dezurn:

Title companies conducting settlements in Maryland are required to register with several state agencies, including the Insurance Commissioner and the Department of Assessments and Taxation. These agencies can provide the names and addresses of the officers, directors or resident agent of the company, even if it has changed locations or ceased doing active business.

Title companies usually are authorized agents of large title insurance underwriters. The agents are permitted to close transactions and to issue title insurance policies on behalf of the underwriters. The underwriter will have detailed information on whether its agent is still in business and can provide contact information on all active agents.

Maryland law requires title insurance companies to hold escrow funds safely and to provide for their continued safekeeping even if the business closes. A title insurance underwriter may be liable under certain circumstances if one of its agents defaults in its legal responsibilities to a buyer or seller of real estate.

The settlement statement you supplied to me clearly shows that the title company holding your $270 escrow is an agent for Fidelity National Title Co.

My telephone call to the legal department of Fidelity National produced a quick, effective response: The title agent that holds the escrow is no longer actively issuing policies or conducting real estate settlements, and its 1998 telephone number is no longer in service. However, the company remains in good standing and its escrow accounts have been maintained safely. Fidelity National gave me the current telephone number to reach the company.

I have forwarded your letter to the president of All Maryland Title Inc. He has assured me that your escrow funds will be disbursed to you promptly.

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