Defining Escrow Fees
After reading Gus Gougas’ letter (June 28) regarding the regulation of escrow fees, it is evident he does not understand the difference between a fee charged by the escrow company and the other fees incurred in his transaction.
The escrow holder will charge escrow fees for standard items such as the base escrow fee, document preparation, obtaining demand statement(s), handling insurance and a loan tie-in fee in the event a buyer is obtaining a new loan for the purchase of the property.
These charges are not “fictitious garbage fees.” These fees are charged for the work involved in handling the transaction.
The fees that Mr. Gougas is referring to are not charged by the escrow holder. These fees show on the estimated and final closing statements prepared by the escrow holder because the statements show a compilation of the fees incurred in the transaction.
For example, the recording fees are charged by the county recorder’s office. The reconveyance fee is charged by the trustee of the note and deed of trust to reconvey (clear) the item from title to the property.
I do not know what Mr. Gougas’ occupation is, although I am certain he expects to be paid for his work. An escrow company is not a charity organization. Just like any other service industry, an escrow company expects to be paid for the work involved in handling a transaction.
Over the years I have found that when a client is reviewing an estimated/final settlement statement, some individuals actually look at the statement and see each category for the fees (title, new loan, payoff, escrow) and they even listen to the answer I give them in explaining what the charge is for and who is charging it.
Unfortunately, some people refuse to listen and they have this idea stuck in their heads that the escrow company is charging all of these fees. Clearly, Mr. Gougas’ letter proves he refuses to listen, and his accusations are erroneous.
President, Escrow L.A. Inc.
Director, Escrow Institute
Gus Gougas’ self-serving diatribe crying for laws regulating the escrow industry is particularly vexing to an independent escrow agent.
We pay thousands of dollars to comply with all the escrow laws already on the books, which are enforced by the state Department of Corporations. Of the many entities involved in the real estate transaction, escrow is the most regulated.
With regard to Gougas’ absurd complaint about “fictitious garbage fees,” he gripes about reconveyance fees, recording fees and filing fees--none of which are escrow fees but two of which are fees charged by the kind of government agency he proposes should be created to curb such fees.
JAMES F. STEWART