SAN DIEGO (Oct. 11, 2002) - Stewart Title of California today announced its settlement of a class action jointly brought by the California Attorney General and the State Controller against all title insurers doing business in California.
Stewart Title is among the first major title companies in California to finalize a settlement with the Attorney General. The lawsuit, which was begun in May 1999, sought to recover millions of dollars in allegedly unearned fees collected by many title companies, as well as interest and other economic benefits earned on escrow deposits.
Under the terms of the settlement, Stewart Title has agreed to pay $2.425 million in cash to a fund to reimburse certain past customers of Stewart, either in the form of automatic payments or in response to submitted claims. As part of the settlement, Stewart Title has modified its collection of certain fees and streamlined the prompt delivery of funds from escrows. Stewart recorded a reserve in prior periods for the amount of the settlement as the investigation proceeded.
The total amount of the settlement with all the title insurers is $50 million.
"The settlement is the product of many months of cooperative meetings and discussions between the company and state lawyers. We believe it is important that title companies doing business in California cooperate with regulators to ensure that the interests of escrow customers remain protected. Stewart Title will work to do this and at the same time remain competitive," added Wasserman.
The complaint against the title companies also included claims by the State Controller to recover money left in dormant escrow accounts. Stewart is not paying any money to the Controller under the terms of the settlement.
Stewart Title of California is a wholly owned subsidiary of Stewart Information Services Corp. (NYSE-STC), a technology driven, strategically competitive, global real estate information company. Stewart provides title insurance and related information services through more than 6,200 issuing locations in the United States and several international markets. Stewart meets the needs of the real estate and mortgage industries through the delivery of information services required for settlement using e-commerce. These services include title insurance, title reports, flood determinations, property appraisals, surveys, document preparation, property reports and background checks. Stewart also supplies post-closing services to lenders, automated county clerk land records and geographic information systems for governmental entities. Stewart provides expertise in tax-deferred exchanges. More information about Stewart can be found at www.stewart.com.