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News from Homestead Escrow

FOR IMMEDIATE RELEASE:

CONTACT:
Julie Richardson
Homestead Escrow, Inc.
Julie@HomesteadEscrow.com
949-249-6600
www.homesteadescrow.com

How Orange County Home Buyers and Sellers Can Protect Their Best Interests Through Independent Escrow Services.

Laguna Niguel, CA, October 29, 2009 — Most consumers aren't aware that there are two distinct classifications of escrow companies with significant differences in the level of regulation and scrutiny imposed on each. In fact, the differences between licensed independent escrow companies and non-licensed, "in-house" escrow companies could have dramatic ramifications on one of the most important transactions of their lives.

"We are showing home buyers and sellers how they can protect their best interests," explains Julie Richardson, CEO and Manager of Homestead Escrow, "by educating them to this little-known aspect of the escrow process. It is knowledge that could help them protect their assets."

Homestead Escrow, an independent escrow company whose headquarters are located in Laguna Niguel in Orange County, CA, is enlightening consumers about the difference between Licensed, or Independent Escrow companies and Controlled, or non-licensed escrow companies--usually the "in-house" division of a real estate brokerage, a title insurance company or mortgage firm.

The basic definition of an escrow account is an account established by a neutral party, under legal provisions, for the purpose of holding funds in trust until the completion or termination of a transaction. Whether you are a home buyer, a seller or a real estate professional, a good criteria when selecting an escrow provider is to ask: "in the event that this transaction ended up going to court, would the escrow officer be able to represent him or herself as a neutral party?"

If that escrow officer works for an in-house non-licensed escrow company, the escrow officer and the real estate representatives are both employed by the broker, and the answer is "no." Independent, or licensed Orange County escrow companies, such as Homestead Escrow, are held to much stricter regulations than in-house, non-licensed escrow services.

Some of the regulations, safeguards and laws Independent Escrow companies must adhere to include:

• Independent escrow companies are licensed and regulated by the California Department of Corporations. (Non-licensed escrow services do not have to conform to these strict regulations and scrutiny)


• They are required by law to be audited once a year and are subject to a "surprise audit" by the Department of Corporations every 24 months. (Non-licensed firms are not subject to these audits)


• All independent escrow personnel are fingerprinted and must have background checks by the Department of Justice. (Not so with non-licensed escrow services)


• If just cause is found, escrow personnel can be barred from working in a licensed escrow office. Also, by law, convicted felons cannot work in an escrow office. (Non-licensed escrow companies are not similarly regulated)


• By law, licensed escrow companies must keep the home buyers' or sellers' funds in an approved bank and must always keep adequate liquid assets on hand. (non-licensed escrow companies do not have these same financial requirements)


• Licensed Escrow companies must belong to the Escrow Agents' Fidelity Corp. which provides coverage in the amount of $5 million. This bond guarantees that, in the event of theft of the trust accounts, the consumers' funds are protected. (In-house, non-licensed escrow divisions are not similarly bonded)

"There are two main reasons why independent escrow companies like Homestead Escrow offer the consumer more peace of mind and real protection of their assets: stricter regulations and the important third-party neutrality," explains Richardson. She adds: "A real estate brokerage's focus is on getting the transaction closed. A bank or mortgage firm's focus is on arranging the financing. Since it is in their financial interest to get the transaction closed, there is the potential for being less neutral and thorough than the home buyer or seller might wish."

For Orange County consumers, all these factors should be a good reason to consider protecting their assets by insisting on a local independent escrow company like Homestead Escrow versus working with the less regulated in-house escrow service affiliated with the brokerage or bank.

To learn more about how working with an independent escrow company can help protect your best interests or to set up an escrow account or to avail yourself of other services Homestead Escrow provides, contact Julie Richardson.

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Julie@HomesteadEscrow.com
949-249-6600

Latest News: Why Orange County Home Buyers and Sellers Are Looking to Protect Their Best Interests Through Independent Escrow Services.