Choosing an Escrow Company
- All escrow companies in California can be grouped into two basic categories:
- All escrow companies in California can be grouped into two basic categories: - Licensed (Independent)
- Controlled (Subsidiary)
- Licensed escrow companies are independent businesses licenced by the California Department of Corporations. This License regulates the procedures and practices of the escrow company and subjects them to strict requirements designed to protect consumers.
- Controlled escrow companies are non-licensed businesses that can be owned by a variety of entities, including Real Estate Brokers, Mortgage Brokers, Banks, Savings and Loans, and Title Insurance Companies. Such companies fall under the jurisdiction and requirements of a variety of supervising agencies, with regulations and requirements that vary widely.
One fact remains constant, The independent escrow companies licensed by the Department of Corporations have the most stringent regulations designed to protect consumers. They simply have higher standards.
The requirements of the Department of Corporations assure that every licensed escrow company meets the highest standards in the industry. Consumer protection rules & regulations unique to Licensed Escrow Companies include the following:
- A Certification Program for all employees in the company, including fingerprinting and background checks by the Department of Justice..
- A requirement that a manager/escrow officer with 5 years of experience be on-site.
- Financial stability requirement, including a minimum of two audits per year.
- Prohibiting employment of convicted felons or anyone who has been disbarred from the escrow industry.
- Membership with the Escrow Agents Fidelity Corporation, which provides a $5 million fidelity bond.
In my opinion, the bottom line is that an independent licensed escrow company is the best possible neutral third party to complete your real estate transaction. Whether searching for an escrow holder yourself, or looking to recommend one to a client or friend, a licensed escrow company gives peace of mind.Corona is home to some of the best independent escrow companies in California: New Dimensions Escrow, Emerald Escrow, Town and Country Escrow and Cornerstone Escrow are all members of the professional organization, The Escrow Institute.*
*EIC members are licensed by the California Department of Corporations, undergo background checks and fingerprinting by the California Department of Justice and are bonded by the Escrow Agents’ Fidelity Corporation.
Deborah Nance
Your Local Southern California Reverse Mortgage Professional
Hi Deborah,
Excellent info and I'd imagine very few CA REALTORS really understand the difference between the different types of escrow companies.
I carry a chart I have in my planner that's a great visual for clients when I explain the difference.
Hi Lynda,
Back in the day (85-90) I used to work as an escrow officer for an independent escrow company. One of the most rewarding, stressful and demanding jobs a person could have. Escrow officers are a wealth of information and a great partner to have in your transactions.
(We still need to get together!)
Deb
Deborah, I totally agree, you need to find the right one
Hi Janice! Thanks for responsding to my post. Not all states are "escrow" states, some are "attorney" states - I've never attended an attorney closing. What type of closings do they do in PA?
Lynda did a great post today on what escrow is.
Great information Deb! The California Escrow Association is also a great Escrow trade organization. Ambergate Escrow, which is also an Independent, is a member. Actually, I will have been on the board for the Riverside County Escrow Asso for the last 4 years. Thanks Deb! Lori
Hi Lori. I am so glad to know you. You are a true professional. You know what, you have to invite me to the next RCEA meeting. I used to be on the board when I had my mobile notary business. Oh, like 10 years ago. They even had a baby shower for me! They are a fantastic caring group of professionals! Independent escrow rocks!