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  Below is an in-depth explanation of how escrow companies in California are regulated, and why using Design Escrow (an independent escrow company) is your best choice for any real estate transaction.
Why Design Escrow?
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Escrows handled efficiently, with integrity & a personal touch... Since 1991
Why Use Independent Escrow? Using an Independent escrow company will give you a greater sense of security. Unlike the traditional title- company or broker-owned escrow, we must comply with stricter auditing, bonding requirements, financial liquidity requirements and trust fund insurance guidelines. Design Escrow is fully licensed by the Department of Corporations for the State of California. It is this set of stringent requirements and guidelines that empowers us to ensure a more secure and reliable experience. Lastly, with no corporate red tape, you can be confident that the most important purchase of your life will be handled seamlessly.
"Licensed" vs. "Controlled" All escrow companies in California must either be “Licensed” or “Controlled.” "Licensed" escrow companies are independent businesses, licensed by the California Department of Corporations. This license ensures proper regulation of the procedures and articles of the company and subjects them to more robust requirements designed to protect the consumer. "Controlled" escrow companies are non-licensed businesses that can be owned by a variety of entities. Commonly recommended to the consumer, and owned by real estate brokers, mortgage brokers, banks, savings and loans, and title insurance companies. Such companies fall under various supervising bodies with regulations and requirement that vary widely. These less imposing regulations/requirements are far less strict than those imposed on the “Licensed” Independent Escrow companies. Better Protection Better Protection Although the majority of escrow companies are honest and above board, the large sums of money handled by escrow companies can attract individuals that may misuse the funds being held in trust. All licensed escrow companies must be members of the Escrow Agents' Fidelity Corporation, which provides comprehensive coverage for member trust accounts in the amount of $5 million. Hence the distinct advantage of using a bonded, licensed, independent escrow company to safeguard your funds and assure the return of your money should anything unforeseen happen. Higher Standards Higher Standards The stringent requirements of the Department of Corporation ensure that every licensed escrow company has met the highest standards in the industry. Some of the regulations unique to licensed escrow companies include: A Certification Program for all escrow officers in the company, including fingerprinting and background checks by the Department of Justice; A requirement that an escrow officer with at least five years experience must be on-site; Financial stability requirements, including a minimum of one CPA audit a year; and frequent surprise examinations conducted by the Department of Corporations; Prohibiting employment of convicted felons or anyone who has been disbarred from the real estate industry; Membership with the Escrow Agents Fidelity Corporation which provides a $5 million fidelity bond; Company's sole business is doing escrow, which requires a higher level of state regulatory requirements and oversight. The bottom line is that a licensed independent escrow company is the best option guaranteeing neutral third party objectivity, and a seamless real estate transaction. Whether searching for an escrow company yourself, or looking for one for your client, no need to look further New Millennium Escrow, Inc. is here to help!
Designed by Kenneth Fasick
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