Another title company quits Modesto and Stanislaus County
North American latest to leave; others merging, cutting staffs
06/20/2008 5:13 AM
06/20/2008 5:21 AM
Another Modesto title insurance office is closing, continuing the escrow industry's exodus from Stanislaus County.
The North American Title Co. will shut its last Modesto office July 18. It previously had closed its Turlock office.
Two weeks ago, Fidelity National Title Insurance closed its Modesto office, laying off some employees and merging the rest with a pared-down staff from Chicago Title. Fidelity's Oakdale office was taken over by Chicago Title.
Alliance Title Co. closed its four remaining Stanislaus County offices in December. And the Financial Title Co. left the county when it closed its Modesto office last winter.
Modesto's remaining title companies, such as First American, Old Republic and Stewart Title, have shrunk staffs and merged branches the past two years to cope with the region's housing market collapse.
"What we're seeing is a huge consolidation in the industry," said David Bakken, president of the San Joaquin Valley Escrow Association. "There's probably only 25 percent (of escrow officers) left."
Bakken said that not only have about three of four officers lost their jobs in the past couple of years, but nearly every escrow assistant has been laid off.
"Most of us do all our own work now. We just don't have enough (clients) to keep assistants employed," said Debbi Zimmerman, a 23-year industry veteran. She had been with Alliance Title before it closed. Now she's with Stewart Title in Modesto.
Back during the housing boom, which peaked in 2005, Zimmerman said she routinely performed 60 to 100 title searches and escrow services per month. That's declined to 25 to 30 per month, even though most of her competition is gone.
"It's a very scary time for all of us, and it's not over yet," Zimmerman warned.
'Everybody was fat on the pig'
People typically use title insurance companies in real estate transactions, such as buying new or existing homes or refinancing mortgages.
Title officers search property records to document legal ownership and liens against the property, such as back taxes or other debts. They also provide escrow services, acting as a neutral third party to ensure the money paid for property goes to the right people.
When housing sales and mortgage refinancing were soaring, Bakken said, "everybody was fat on the pig." He said title officers were flush with work back then, many of them made big money and the smart ones saved their earnings.
"I'm one of the fortunate ones," said Bakken, who's been a stay-at-home dad since being laid off from Old Republic about two years ago.
Though Stanislaus County home sales have picked up in the past two months, many of those transactions are not being processed by local title companies. That's because a high percentage of recent deals involve banks selling previously foreclosed properties, and those banks often funnel all their transactions to select title companies.
Zimmerman said Southern California title companies are handling many of those deals, but managers at her office are trying to get banks to shift that business back to Modesto.
Bee staff writer J.N. Sbranti can be reached at firstname.lastname@example.org or 578-2196.
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