As memories of boom fade, ‘I’ll be happy to break even’

Times Staff Writers


Owner, Viva Escrow


Viva Escrow used to offer a rare benefit for its 16 full-time employees: 100% payment of their health-insurance premiums.


Last month, the 10-year-old San Marino company decided it could no longer afford it.

“We cut to paying only 50%,” said Juliana Tu, 54, Viva’s owner. “No one was happy, of course, but we had prepared them since March or April that the market was so slow, and the company had to tighten its belt. So I don’t feel it was a major surprise.”

Tu, who lives in Arcadia, said she had become more frugal in her personal life as well. She and husband Kenneth Ma dine out less often and choose “less fancy places,” she said.

“Instead of going to the movies, we rent movies,” she said. “It really adds up. I tell my own staff you have to live as debt-free as possible. If you buy that $700 purse, it really cuts into your budget.”

As an escrow agent and a director of the California Escrow Assn., Tu had a bird’s-eye view of the refinancing boom fueled by rising home prices and easy credit.

“We had people pulling out equity to pay off 20, 30 credit cards,” Tu said. “A year later, they’d be back. As long as prices went up, they figured, ‘I’ve got equity.’ Well, no more.”

With prices falling in many communities, some people now have a mortgage that exceeds their home’s value. Many are now “selling short” -- taking a financial loss before things get worse. “We’ve seen so many short sales in the last few weeks,” she said.

Escrow agents act as third-party financial trustees in real estate transactions. They make sure money is set aside and the right parties are paid -- seller, broker, lender and others -- before a property title is transferred or updated. For this they are paid a percentage of each transaction.


“When the market boomed, it really boomed,” Tu said. “Five years ago, I had clients coming out of the woodwork. I didn’t have to advertise. Everybody was buying a home or a second property.”

Tu estimated her revenue had dropped by half in the last year. She has trimmed about one-third of her staff, either by attrition or layoffs.

“Things took a real dive in November,” she said. “The refinance market dried out in February, then the sub-prime just fell from the bottom. . . . You don’t want to cut people, but I’ll be honest with you: We are in a loss situation. I’ll be happy to break even.”