ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Friday, November 1, 1996 TAG: 9611010028
SECTION: BUSINESS PAGE: A10 EDITION: METRO
DATELINE: RICHMOND
SOURCE: ASSOCIATED PRESS
A coalition of groups that support allowing non-lawyers to close real estate deals proposed a set of rules to regulate the industry Thursday.
The plan put out by the Coalition for Choice in Real Estate Closings is designed to answer concerns by lawyers that the public is threatened if non-lawyers are allowed to do closings.
In October, the Virginia State Bar proposed that home buyers and sellers be required to hire attorneys when they close real estate deals.
The coalition's plan was presented to the joint legislative subcommittee on real estate practices, which is studying the issue. The plan would regulate or certify all closing agents, set a financial performance standard for both lawyers and non-lawyers and set up an industry oversight body to monitor industry practices. Until now, the industry has been self-regulated.
The coalition says that banning non-lawyers from closings has nothing to do with protecting the public.
``We think the whole issue is about the fee, not about protecting the consumer,'' said Walter Ayers, executive vice president of the Virginia Bankers Association, one of the members of the coalition. ``Not one shred of evidence has been put forward suggesting a consumer has been hurt in a bank-closed loan.''
The coalition also argues that the bar's decision could force many settlement and title companies out of business.
``It would eliminate an entire industry overnight that has been building for 15 years,'' said Brian Ball, a spokesman for the coalition.
But the chief proponent of lawyer-only closings, the Virginia Real Estate Attorneys League, or VaREAL, argues that the public will be placed in danger if lawyers aren't present when real estate deals are closed.
``Anyone who doesn't hire a lawyer to do a closing is out of their cotton-picking minds,'' said Stephen Haner, spokesman for VaREAL.
Haner called the industry regulation plan proposed by the coalition inadequate and said there was no proof that prices would rise if only lawyers were allowed to do closings.
The bar's decision still has to be scrutinized by the state Supreme Court.
The legislature is also studying the matter, however, and could overturn or modify any Supreme Court decision.
Lawyers with VaREAL showed the subcommittee a typical real estate closing and said a non-lawyer would have a difficult time interpreting the reams of legal documents.
That conclusion was challenged by Frank McCormick, senior vice president at Lawyers Title Insurance Corp., which works with both lawyers and lay practitioners on real estate closings.
``We see no greater incidence of problems between lay settlement folks and lawyers,'' he said.
LENGTH: Medium: 58 linesby CNB