In today's economy, people are focused on the cost of services, which is completely understandable. But what about the service itself? Let's take a look at what an escrow officer really does, and what the closing/settlement fee covers.

To refresh your memory, in New Mexico, title companies provide both title insurance and escrow services. An escrow officer is the person responsible for the file from the moment the order is received: when the contract has been signed and delivered to the title company. When the contract is received, the escrow officer reviews the contract and any counter-offers or amendments; makes notes regarding the closing date and delivery deadlines for the title commitment, the survey or ILR; and then processes the file. When the file is processed, it goes to the title department for the search and title commitment preparation. The escrow officer reviews the title commitment to determine what the closing requirements are and then forwards the title commitment to all parties to the transaction for their review.

The escrow officer keeps in touch with the Realtors regarding status of inspections and other items, and will request approval to order the survey or ILR. The escrow officer orders loan payoffs; requests information on homeowner association dues; contacts the City of Santa Fe for utility billing information; and contacts the county treasurer's office to obtain information on property taxes, to name a few of the required items for closing. Obtaining all of this information is time-consuming and can be frustrating.

Frustrating? Yes! While procedures vary from company to company, most escrow officers send the seller an information form to complete and return. This form requests information such as the lender name, phone number and loan number for all outstanding mortgages on the property. The form also authorizes the title company to obtain the required payoffs. Without this information, we cannot complete this portion of our job.

On the buyer's side, the escrow officer works with the lender regarding loan document delivery. The buyer's portion of the settlement statement cannot be completed until the lender's instructions are received. Sometimes this is a couple of days ahead of the closing, and sometimes this is the day of closing. This is one aspect that we cannot control. Once the lender's instructions are received, the escrow officer prepares the buyer's portion of the settlement statement and forwards it to the lender for approval. Normally loan documents will not be drawn until this step has been completed. Once the lender approves and the loan documents are received, we then move to the "closing."

The closing consists of the seller and the buyer each signing their respective documents. Because New Mexico is a nondisclosure state, we rarely close the buyer and seller together. This means that for each file there are two "closings" - one for the buyer and one for the seller. After the documents are signed, the escrow officer must provide the lender with the required documents for funding approval. This can be as easy as a copy of the settlement statement and the note, or as complicated as sending the entire loan package for review. Once the lender's approval has been received, and all funds have been received, the documents are sent for recording, and the funds are disbursed. When all of these steps have been completed, the escrow officer usually contacts the Realtors to advise them that we are "done."

The settlement/closing fee covers this portion of an escrow officer's job. The fee paid for title insurance covers the cost of the title insurance. These are two separate and distinct items. So when you are shopping price, be sure you shop service as well!

If you have questions regarding title insurance and/or escrow services, please feel free to e-mail me at debora.adinolfi@stewart.com and I will be happy to answer them for you.



Deby Adinolfi (505-954-3328) is an escrow officer for Stewart Santa Fe Abstract, serving Santa Fe and Los Alamos counties. She has over 25 years of complex real-estate experience which includes, in addition to her escrow experience, working as a real-estate paralegal and working for real-estate developers.