Choice of Escrow Bill, AB 957, reaches compromise on wording.

The new language in this Assembly Bill now protects fair negotiation over settlement services.

The new language will codify in California law the federal Real Estate Settlement and Procedures Act (RESPA) rules for selection of title insurance, and extend the same rules to protect buyers in the selection of escrow services.  In a nutshell, the sellers will have to negotiate the selection of title and escrow. Under the new language, if an REO (Bank or Asset Management Company) seller wants to try and direct choice of escrow, the seller will have to pay for the privilege.

AB 957 will also impose new penalties on REO sellers that violate the law, and will empower state regulators to go after both RESPA and "steering" violations. The compromise also includes a sunset of the of the escrow component effective Dec. 31, 2014.

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