Title Companies

Dozens of home-sale deals across the state threatened to fall apart yesterday, as title agents, borrowers and sellers learned that Columbia-based Consumer First Mortgage Inc. had failed to deliver on some 60 loans and abruptly shut down Wednesday.The mortgage company's failure to fund loans for houses set to change hands at the end of July set off a panic among title companies handling those property settlements, raising questions about who owned the houses or held the loans.Some companies -- believing mortgage money had been wired to their accounts -- conducted property transfers, paying off sellers, real estate agents and other expenses, only to find Consumer First had sent no money.

Settlement is the absolute end of an often arduous process -- it's time to sit down, sign a lot of papers, hand over the check, and get the keys.But not so fast. Although settlement can run without a hitch, buyers should work to make sure it does. Delays at this point -- just as you're set to make that home yours -- can be disheartening.Some problems can't be avoided, settlement officers say, especially as home buying has become more complicated. State and federal laws call for ever more paperwork, out-of-town investors often add another layer of scrutiny and lenders can be overloaded with work, especially with refinance loans.

When Marylanders go to the settlement table to purchase a home or refinance a mortgage, they may now also be helping to provide affordable housing for state residents.Under a law that took effect Thursday, interest earnings of less than $50 from real estate settlements will fund the newly created Maryland Affordable Housing Trust. The trust, a non-profit administered by an independent board, will use the money to fund housing and related services for the poor.The program to divert interest on escrow accounts was created by state legislators, despite bitter opposition from title companies.

ANNAPOLIS -- Maryland's title companies won Round One in a legislative fight that they said threatened to raise home settlement costs by imposing millions of dollars in taxes on the industry.The victory came from Sen. Walter M. Baker, D-Cecil, the sponsor of a bill that would have required title companies to pay the state some of the interest they earn by holding client trust accounts.Currently, law firms, which do many of the same real estate settlement services as title companies, must give up that earned interest to the non-profit Maryland Legal Services Corp.

ANNAPOLIS -- Despite the threat of higher home closing costs, the General Assembly yesterday approved a bill that would require title companies to donate their escrow account interest to a new fund for affordable housing.The 81-53 vote by the House of Delegates sent Senate Bill 594 to the governor for his likely signature. And it ended a five-year battle between law firms and title companies, who sought to protect what they argue is their money.The money -- small amounts of interest earned when a title company holds a client's home purchase money in an escrow account -- will go to a fund to establish housing for the poor.

ANNAPOLIS -- Maryland's title companies won Round One in a legislative fight that they said threatened to raise home settlement costs by imposing millions of dollars in taxes on the industry.The victory came from Sen. Walter M. Baker, D-Cecil, the sponsor of a bill that would have required title companies to pay the state some of the interest they earn by holding client trust accounts.Currently, law firms, which do many of the same real estate settlement services as title companies, must give up that earned interest to the non-profit Maryland Legal Services Corp.

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.

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.

Lawyers and title agents are warming up for their annual battle over interest on client escrow accounts -- the interest earned on the large sums of money they hold briefly when their clients buy homes.Last year's struggle became particularly nasty as various lawmakers dragged legal and housing programs for the poor into the fray. After dozens of late-session machinations, the fight ended in a stand-off.This year's legislative proposal has Sen. Walter Baker, chairman of the Judicial Proceedings Committee and a longtime enemy of the Maryland Legal Services Corp.

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.

A real estate title company in Severna Park and Ocean City was shut down after as much as $2 million from its escrow account for property settlements allegedly turned up missing, according to court documents and state regulators. Maryland Insurance Commissioner Ralph S. Tyler ordered yesterday that business licenses for Day Title Inc. and owner Deborah A. Williams be suspended and revoked. The Maryland Insurance Administration issues licenses and regulates title companies, which conduct real estate closings.

Title insurance typically is a mandatory and large cost for most home purchasers and mortgage refinancers - often in the $1,000 to $2,000 range. But is it priced too high for what you actually get? Equally important: Do widespread referral relationships among real estate brokers, title agents and mortgage companies restrict price competition, create anti-consumer conflicts of interest, and discourage buyers from shopping for lower-cost title insurance and closing service options? The Government Accountability Office, the nonpartisan watchdog agency of Congress, made an in-depth examination of the title industry over the past year and came up with some unsettling findings: "Multiple characteristics of current title insurance markets, as well as allegedly illegal activities by a number of those involved in the marketing of title insurance, suggest that normal competitive forces may not be working properly, raising questions about the prices consumers are paying."

THE BUSH administration sent a shot across the bow of the home mortgage settlement industry last month: Cut out illegal kickbacks, overcharges and other anti-consumer practices at real estate closings or face steep penalties - even prison time - under federal law. The administration is backing up its warning by tripling the staff and budget at the offices within the Department of Housing and Urban Development (HUD) that investigate complaints about settlement cost abuses. It is also contracting with outside professional investigators including FBI veterans to track down violators, and it is making heavy use of state attorneys general and banking regulators.

A new name decorates the skyline at The Mall in Columbia, one that is homegrown. Fountainhead Title Group, founded in Columbia in 1975, has taken over the former One Columbia Center on the outer rim of The Mall for its headquarters, affixing its name to the side of the building. The expansion of the state's largest title company occurs during a rapid growth spurt. Fountainhead has more than tripled its business in the past four years and anticipates more growth. The company plans to open up to seven offices in the next six months, bringing its total to 35, and expects to hire at least 100 people in the next year, said William Yerman, president of the company's Maryland Division.

Dozens of home-sale deals across the state threatened to fall apart yesterday, as title agents, borrowers and sellers learned that Columbia-based Consumer First Mortgage Inc. had failed to deliver on some 60 loans and abruptly shut down Wednesday.The mortgage company's failure to fund loans for houses set to change hands at the end of July set off a panic among title companies handling those property settlements, raising questions about who owned the houses or held the loans.Some companies -- believing mortgage money had been wired to their accounts -- conducted property transfers, paying off sellers, real estate agents and other expenses, only to find Consumer First had sent no money.

Settlement is the absolute end of an often arduous process -- it's time to sit down, sign a lot of papers, hand over the check, and get the keys.But not so fast. Although settlement can run without a hitch, buyers should work to make sure it does. Delays at this point -- just as you're set to make that home yours -- can be disheartening.Some problems can't be avoided, settlement officers say, especially as home buying has become more complicated. State and federal laws call for ever more paperwork, out-of-town investors often add another layer of scrutiny and lenders can be overloaded with work, especially with refinance loans.

When Marylanders go to the settlement table to purchase a home or refinance a mortgage, they may now also be helping to provide affordable housing for state residents.Under a law that took effect Thursday, interest earnings of less than $50 from real estate settlements will fund the newly created Maryland Affordable Housing Trust. The trust, a non-profit administered by an independent board, will use the money to fund housing and related services for the poor.The program to divert interest on escrow accounts was created by state legislators, despite bitter opposition from title companies.

ANNAPOLIS -- Despite the threat of higher home closing costs, the General Assembly yesterday approved a bill that would require title companies to donate their escrow account interest to a new fund for affordable housing.The 81-53 vote by the House of Delegates sent Senate Bill 594 to the governor for his likely signature. And it ended a five-year battle between law firms and title companies, who sought to protect what they argue is their money.The money -- small amounts of interest earned when a title company holds a client's home purchase money in an escrow account -- will go to a fund to establish housing for the poor.

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.

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.