Title companies ride wave of surging home sales.

The surge in home sales and low interest rates has created a bull market for title companies in Los Angeles County, which saw the value of refinance and sales mortgages jump 21 percent last year over 1996 levels.

Title company officials say the hot market has continued in the first three months of this year, and that they are enjoying even more business now than during the real estate boom of the late 1980s because so many people are taking advantage of low interest rates to refinance their homes.

"It's a title company's dream," said Allen Meadows, chief financial officer for Fidelity National Title Insurance Co.

Title companies - which insure there are no liens or other encumbrances on a property - handled $47.3 billion in refinances and sales mortgages last year, of which nearly $20 billion was in refinances, according to Anaheim-based Experian Information Services, a real estate research firm.

The volume of transactions was up 14 percent for 1997, Experian reported.

Perhaps the strongest indication of the robust pace of the real estate market is the appreciation in the average value of sales mortgages. The average value of a home-purchase loan rose to $203,117 in 1997 after holding steady around $190,000 the prior three years, according to Experian.

Business is up beyond just mortgage and refinancing insurance at title companies. Customer service requests are up 10 percent from last year at Glendale-based Stewart Title Co. Just last month, the firm conducted 5,000 profiles (an assessment of tax records and property information for a specific site) and 800 reports on comparable sales data, known in the industry as farm reports.

The company has so many requests that it often handles only orders from its active clients, said Claudia Queen, senior vice president of the company.

In fact, the rising tide of L.A.'s real estate market has bolstered back-office operations across the industry. The bulk of title and escrow companies' business comes from residential transactions, which account for the majority of real estate deals.

Home resales in Los Angeles County climbed 9 percent in February compared with the same period last year. The median sales price of $176,150 last month was up 5.6 percent from February 1997, according to the California Association of Realtors.

Tim Finerty, an office manager at Beverly Hills-based Escrow Exchange, said that one of his officers had 31 closings scheduled last month - compared to a typical workload of 10 or 15.

Mortgage lenders and escrow companies almost feel "bombarded" with business, he said, noting that there's more work out there than most mortgage lenders and escrow companies can handle.

Title and escrow company officials acknowledged that this has led to delays, sparking complaints from some customers.

To complicate matters, the industry is swamped with business at a time when the labor pool is dry. Many appraisers, escrow officers and title company agents left the region - or the industry altogether - during the recession.

"It sometimes feels like there's no one left out there to hire," Finerty said. "So you have to do your best to maintain a steady, accurate staff."

The sales volume and appreciation of commercial properties have taken off as well. That market provides a smaller portion of most title and escrow companies' business, but it's where the biggest deals are.

All of this sales activity translates into more business for title firms as well as escrow companies, which act as a neutral third party that holds the money and paperwork until the conditions of a contract are met.

The market is equally robust on the refinancing side, as property owners are taking advantage of record low interest rates to lower their loans.

That means business is up at real estate appraisal firms, whose services are commissioned and used by mortgage lenders to make sure a property is valued at its accurate price.

The volume of business is up about 15 percent at the real estate appraisal firm PCV/MURCOR. Keith Murray, a principal at the firm, said the bulk of his business these days is for home purchases and refinances.

At Sommer Adler & Co., an appraisal firm that handles primarily commercial property, the company has had to turn down about one-third of its requests because it simply does not have the staff to handle it, according to Michael Adler, a principal.

Appraisal firms work on a flat fee, so they benefit from an increased volume of transactions - not an appreciation in the market Escrow and title companies, however, get a percentage based on a property's sale price.