Title Company Requests Formal Hearing

FOR THE RECORD (August 18, 1995): The closing fee for a home purchase typically is about 0.5 percent of the sales price. An article in Thursday’s Spokesman-Review gave an incorrect figure.

State Rep. Todd Mielke says the state insurance commissioner may have overstepped her bounds in attempting to suspend Spokane County Title Co. from doing business for six months.

“Title insurance is the sole area of her jurisdiction over Spokane County Title,” Mielke, R-Spokane, said at a news conference Wednesday. “Yet I hear people in the insurance commission office say, ‘We just don’t believe they are charging an adequate price to make a profit in their escrow business.’

“The insurance commissioner doesn’t have jurisdiction over the escrow part of their business.”

John Schreiner, president and owner of Spokane County Title, arranged the news conference to announce the filing of a formal demand for a hearing on the matter.

The request for hearing will delay Insurance Commissioner Deborah Senn’s order that Spokane County Title shut down for six months.

Senn imposed the suspension last month, charging that Spokane County Title’s practice of charging a flat $200 fee for any residential real estate closing is a violation of state insurance regulations because the company couldn’t make a profit at that rate.

“In effect, they were using the escrow business as a loss leader,” Senn said.

But Schreiner says his company has turned strong profits with the flat closing fee during the past three months. He said Senn’s investigation looked only at the company’s returns during the first four months of the year before the local market had responded to the new rate.

He says Senn is responding to “a smear campaign” by a group of Spokane closing attorneys who don’t like losing business to Spokane County Title’s low closing rate.

“It’s a sad day when a company gets in trouble for lowering its prices,” Schreiner said Wednesday. “Just the sound of it is ludicrous.”

Schreiner says that until Spokane County Title offered the flat $200 rate in January, virtually everyone who provided closing services in Spokane charged 1.5 percent of the sales price of a home. That would be $1,500 on a $100,000 house.

“A small but determined band of real estate attorneys and other closing agents have barraged the insurance commissioner’s office with lies and gross misstatements of fact about us,” Schreiner said.

Schreiner said he has taken a polygraph exam to counter some of the allegations made to Senn’s office.

Mielke said he became involved because he wants to be sure Schreiner’s company is treated fairly. Even if one assumes that the charges against Spokane County Title are true, Mielke added, neither Schreiner nor the company has any record of previous violations, “and this seems like a pretty harsh penalty for a first-time offense.”

And, he said, injecting itself into the business practices of Spokane County Title’s escrow operations is beyond Senn’s jurisdiction.

“When a company can dramatically cut its prices and still make a profit, as Spokane County Title has done, we should applaud them,” Mielke said. “They’re saving us money.”

The filing of a request for hearing leaves Spokane County Title free to operate until the hearing, which likely will take place in four or five months.

, DataTimes