Financial Title Shuts Down

The Business Journal is reporting Financial Title Co. shuts down in California.

Financial Title Co., the largest real-estate title agent in Silicon Valley, has shut its doors as part of a closure of multiple offices and title companies by its parent, Mercury Cos. of Colorado.

The decision follows a move by Mercury's lenders to pull their line of credit after Mercury failed to meet loan requirements, according to an e-mail from Jim Hilbun, president of United Title of Texas, which is also owned by Mercury.

"Mercury is closing all of its companies outside of Colorado, which includes Arizona, California, Oregon and Nevada," Hilbun told employees.

Workers were removing items before dawn on Wednesday from Financial Title's Pruneyard office in Campbell. A sign posted on the door said the office was closing and referred inquiries to First American, Financial's title policy underwriter, and to Mercury.

Sources who have spoken to Financial Title employees said the title company began closing its doors in Santa Clara County Tuesday night. Those sources said all employees have lost their jobs, and Financial's underwriter, First American Title Co., has been collecting open escrow files at the closed offices. They also say Financial Chief Executive Officer Ivy Anderson has resigned.

The abrupt move mirrors that of Financial's former sister company, Alliance Title Co., which also closed with almost no notice late last year. Former employees and landlords of Alliance have filed multiple lawsuits alleging they were not paid. Alliance declared Chapter 7 bankruptcy in Northern California federal court June 5.

Examiners representing the California Department of Insurance, which regulates and polices title-policy underwriters and agents, were on hand at all 57 Financial Title offices in the state Wednesday to ensure that escrow funds were properly handled and not stolen or lost, said Darrel Ng, press secretary for the agency.

Escrow Funds

Those examiners cannot ensure anything. All they can do is check whether or not escrow funds were properly handled and not stolen or lost. By the way, money cannot be lost. It can be applied to the wrong account. If I had any escrow funds at Financial Title Co., I would be very concerned right now.

Addendum

The Sacramento Bee is reporting Citrus Heights title firm closes.

Ng said the state has examiners at each of Financial Title's 57 branches. Escrow files have been transferred to First American Title, and "it is our understanding that all escrow funds are intact," he said.

He said homebuyers might "experience a slight delay" in closing purchases and might have to sign additional paperwork because of the transition to First American. Purchasers can call First American at (925) 249-2819.

Employees were directed to call Mercury's Denver headquarters at (303) 572-9090.

Officials at Mercury Companies and Financial Title couldn't be reached for comment today. But, in a memo to employees, an executive with a Mercury subsidiary based in Texas said Mercury is closing all of its operations outside of Colorado because it's "running out of capital to support their operations."

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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