05/11/1999 01:45 PM Senate L&C

              HB 13-REGULATION OF ESCROW ACCOUNTS                                                                               
                                                                                                                                
CHAIRMAN MACKIE announced HB 13 to be up for consideration.                                                                     
REPRESENTATIVE ROKEBERG, sponsor of HB 13, said this bill is                                                                    
simple, but it is needed to protect consumers.  It requires that                                                                
good funds be in the hands of the title company prior to recording                                                              
of the title in a residential real estate transaction.  Typically,                                                              
title companies record first and then get the money.  This bill is                                                              
driven by the lending institutions which force the title companies                                                              
to record first, because they don't want to release funds on                                                                    
certifiably recorded title.  He noted that Ms. Ann Ringstad was a                                                               
victim of this circumstance and that the incidence is raising.                                                                  
                                                                                                                                
REPRESENTATIVE ROKEBERG said HB 13 was supported by the Alaska                                                                  
Escrow Association which has already changed their policy in April                                                              
to do this.                                                                                                                     
                                                                                                                                
MS. ANN RINGSTAD related how this applied to the sale of their home                                                             
in Anchorage four years ago when a couple bought their house, but                                                               
stopped the funds from transferring when they thought the house was                                                             
flooding.  This happened after the title company had been assured                                                               
by the bank that the funds were coming.  So the Ringstads had no                                                                
house, but were still liable for the mortgage; the deed was                                                                     
recorded into the buyer's name.  If the title company would have                                                                
waited until they received the funds, there would have been no                                                                  
problem.  It took them about four months to get the house back and                                                              
were told it would take them about two years if they wanted to go                                                               
to court (and they would probably win, but it would cost $30,000).                                                              
                                                                                                                                
Number 284                                                                                                                      
                                                                                                                                
SENATOR LEMAN moved to report HB 13 from committee with individual                                                              
recommendations.  There were no objections and it was so ordered.