Arrow-right Camera
The Spokesman-Review Newspaper
Spokane, Washington  Est. May 19, 1883

Title Firm, State Settle Allegations Spokane County Title Cleared Of All But 10 Minor Violations

Bert Caldwell Staff Writer

Spokane County Title Insurance Co. has been cleared of the most serious allegations made against its flat-fee escrow service, Washington Insurance Commissioner Deborah Senn said Wednesday.

Although the company will pay $2,500 in fines for 10 minor violations of Washington regulations, she said an investigation by her office did not support claims Spokane County Title was subsidizing its escrow service with revenues from title insurance operations.

Attorneys for her office and Spokane County Title signed an agreement resolving their dispute Thursday after a last-minute split over wording and other details was resolved.

On August 19, her office ordered the company to suspend title insurance sales for six months. Several Spokane County attorneys and closing companies had charged Spokane County Title was losing money on a $200 flat fee it began charging in January for real estate closings.

To cover the losses, they alleged, the company was using the fee - a fraction of that charged by competing attorneys and title companies - to induce real estate agents and mortgage companies to use its title insurance services.

Senn said Wednesday that did not occur.

“They have not been led to buy the title insurance,” she said.

Nor, Senn said, was there any evidence Spokane County Title was willing to take losses on its $200 escrow service to drive competing firms out of business.

“This was not as unusual as first presented,” she said. “Other companies are using a $200 flat fee as well.”

Senn said her order of suspension had been intended to preserve competition in the Spokane marketplace.

“The market continues to be very vibrant,” she said.

Senn said Spokane County Title was fined for improper discounts made to company clients before the flat fee was introduced.

State insurance codes forbid title companies from giving rebates or anything else valued at more than a total $25 in a year’s time.

Spokane County Title president and owner John Schreiner said the few discounts he awarded were no more than the same professional courtesy others in the escrow business give clients.

“We were playing the game the same way everybody else plays the game,” he said.

Schreiner said his company never stopped selling title insurance because he appealed Senn’s order. But business suffered because of the enforcement action, he said, and expenses totaled more than $75,000.

“Let’s not forget that this entire issue was started by a group of real estate attorneys whose fees for closing really stuck it to consumers,” Schreiner said. “Senn’s office bought what they said hook, line and sinker.”

He noted that he had to agree not to sue the insurance commissioner as part of the settlement.

Although the regulatory dispute has been resolved, he said, “It’s also important for me to be vindicated in the consumers’ eyes.

“We stood up for consumers and we won.”

, DataTimes