No one saw it coming. An estimated 500 California employees are affected by the sudden closure of Financial Title. In Texas, 190 people lost their jobs, plus others in Arizona and Nevada.
Buyers and sellers with escrows at Financial Title Company are being transferred to another company.
Escrow officers and their clients showed up to work Wednesday morning to a notice posted on the door. Their office, and 56 other across the state were no longer in business.
"It was a surprise to everybody, a surprise to me, especially a surprise to the employees," Financial Title customer Peter Baldacci said. "They had no idea until they arrived this morning."
Employees were joined by state insurance examiners to safeguard and move real estate transaction files Financial Title was in the middle of processing.
"If they had given us some warning, that would have been different, but absolutely no warning whatsoever," special projects manager Donna Mahoney said.
Financial Title was a fast-growing company, not the biggest or the oldest, but one with a solid reputation.
"Financial Title had terrific escrow officers, terrific sales support staff," Ilse Cordoni said. Cordoni manages the south of Market office of Zephyr Real Estate. Financial Title was handling about five closings for her agents.
"It's not a happy message; I think it makes buyers very anxious," she said.
Financial Title has not returned any phone calls. A company executive in Texas, however, has indicated the parent company lost its line of credit after failing to meet loan requirements.
Tightening credit may be impacting businesses.
"I think these lenders are going to start to pay," Mahoney said. "They're not just doing this to people - personal people - they're taking their lines of credit away and doing it to companies too."
Another title company, First American Title, is stepping in to ensure that transactions are successfully processed to completion. State insurance officials told ABC7 escrow transactions being handled by Financial Title might face slight delays, but that alone should not cause deals to fall through.
Despite that, Derrick Nesbitt was quick to show up to reclaim escrow papers for a client.
"When the title companies are struggling like this, Lord knows what's going to happen to the rest of the industry," he said.
Additional Resources:
Financial Title customers are being told to call First American Title at (925) 249-2819 for more information.
