Senator fights mandatory escrow fees imposed by state commission

A bill intended to keep the closing costs on home purchases affordable for the average buyer was introduced on the floor of the Senate Friday by Sen. John Valentine, R-Orem.

Valentine said the state Title and Escrow Commission had issued a rule last week setting mandatory minimum fees for escrow companies to perform home purchase closings and told fellow senators "we need to stop this abuse."

He said the mandated minimum fees, scheduled to take effect within 90 days, would range from $150 to $350 per side depending on the size of the home.

Valentine's proposal would block the commission's new rule and prohibit any sort of mandatory minimum charges from taking effect. He said escrow fees should "be part of the competitive market," which would keep them lower.

"This will force the individual companies to compete with each other," he said.

Valentine said he expected stiff resistance to his proposal from the title and escrow industry because the individual companies would prefer to have the commission rule as an excuse to charge customers the higher rates.

"If the title companies were just getting together and doing this on their own, it would be a violation of federal law," Valentine said.

E-MAIL: dservatius@desnews.com