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2 Title Insurance Firms Seized by State Regulators

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TIMES STAFF WRITER

State insurance regulators seized two related title insurance companies and stationed examiners at a third affiliate after the parent company was accused of mishandling customer funds.

Regulators raided Universal Title Co. offices across the state, including its headquarters in Big Bear and several branches in Los Angeles, as well as three offices of Sacramento Title Co. Examiners also are monitoring business at Pacific Coast Title of Marin, which has offices in Novato, San Rafael and Mill Valley.

“We run the operations,” said Insurance Commissioner Chuck Quackenbush. “I own the company now.”

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Regulators said that Universal--which lists more than 40 locations in Los Angeles, Orange, Ventura, Riverside, San Bernardino and San Diego counties on its Web site--was using money from customers’ escrow accounts to pay its own bills, and that Sacramento Title’s records showed it was insolvent.

Home buyers deposit money in escrow accounts to pay for title searches and other costs of buying a home. Quackenbush said the seizures could delay some of the hundreds of home purchases the companies were handling, but added that other title companies would take over the accounts to make sure the transactions are completed.

Regulators advised customers of the three companies to call the Insurance Department hotline at (213) 897-8921 in Los Angeles or (800) 927-HELP in the rest of the state.

The raids are the latest enforcement action against title companies by the state.

Regulators collected a $2.5-million fine from First American Title Insurance Co. last year after accusing the company of making illegal kickbacks to real estate agents. State Controller Kathleen Connell has also filed a class-action suit against title insurers and escrow companies, accusing them of overcharging California home buyers.

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