Title company bites dust, leaves home buyers in limbo
|January 25, 2005|
Real estate transactions on hold
By Janis Mara
Capital Title Co. of St. Louis shut down last week, delaying the closings of dozens of home sales and leaving an undetermined amount of money held in escrow by the company unaccounted for.
Details of the closure and why it happened were sketchy. Several unnamed sources told the St. Louis Post-Dispatch that funds were stolen from the company.
Capital was placed in receivership last Tuesday at the request of two companies that underwrote its business, according to David Schulz, a spokesman for First American Title Co. of Santa Ana, one of the underwriters. Land Title Insurance Co. of Des Peres, a First American subsidiary, was the other underwriter.
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First American said it was investigating an alleged diversion of escrow funds by Capital, a St. Louis-based title insurance agent with 13 offices in the area. All 13 closed on Jan. 18.
Robert Jones, a Clayton, Mo., attorney, told the Post-Dispatch his job is to determine what assets Capital may have left and liquidate them. He said it was too soon to tell how long this would take.
The two underwriters will try to make up for at least some of the missing escrow money, according to Schulz.
So far, the number of victims isn't known, Schulz said. He said the two underwriters on Tuesday received about 100 phone calls about the closing last week. The underwriters didn't realize Capital was closing until Tuesday because Monday was a holiday.
Meanwhile, closings all over the area are in limbo, with home buyers unable to complete their transactions. Capital had 13 offices in the area and handled about 8 percent of local house closings, according to Schulz.
Peter Shaw, president and co-founder of Capital, did not return calls asking for comment.
Copyright 2005 Inman News