SANTA CLARITA : Escrow Firm Shut Down in Probe of Missing Funds

State regulators have shut down Santa Clarita’s largest residential escrow company, disrupting thousands of home sales, after a routine examination uncovered more than $2 million missing from the firm’s $4.5-million trust fund.

Officials of the state Department of Corporations have frozen the remaining assets of the firm, Country Oaks Escrow, as inspectors comb the company’s financial books. Shocked real estate agents estimated that the firm handled from one-third to more than half the city’s escrow transactions.

Regulators closed the Valencia office Friday afternoon after a company representative told them of the shortfall, said Dale Lucas, chief examiner of the Department of Corporations.

“Right now, everything is frozen so we can determine the degree of the problem,” Lucas said. “The people who have funds in the escrow shouldn’t have any problem getting their funds back.” Between 800 and 1,000 homes were in escrow in the Valencia office of the company, which has branches in Palmdale, Lancaster and Arcadia, Lucas said.