Guaranty Title abrubtly closes doors, state investigation opens

Guaranty Title Co. closed its offices – primarily in Greene, Christian and Lawrence counties – without warning. Springfield Business Journal’s calls to several of the offices during business hours June 20 were met with recordings.

A piece of paper hanging on the door of the 2217 E. Kearney St. office directed customers to call a Nixa phone number. A recording at that number instructed callers to leave detailed messages, but the recording looped without allowing callers to do so. The recording urged callers to contact the agency via fax or e-mail.

“We apologize for the inconvenience,” the recording said. “We are working diligently to return all phone calls and address all issues and concerns.”

Rick Burton is company president and registered agent for Guaranty Title, which was created in 2001, according to the Missouri Secretary of State’s office. Guaranty Title is not affiliated with Springfield-based Guaranty Bank.

Burton also was listed as the registered agent for the now-defunct Springfield Title Co., which was created in March 1998 and dissolved in September 2005.

The Missouri Department of Insurance, Financial Institutions and Professional Registration is investigating the circumstances surrounding the title agency’s sudden closing, agency spokeswoman Emily Kampeter said in a June 19 telephone interview.

“We are charged with regulating insurance companies, and it’s also important that we ensure that consumers are protected in this situation,” Kampeter said. “We will be reviewing their financial records and accounts.”

Kampeter said the state has been in touch with Guaranty’s underwriter, Commonwealth Land Title Insurance Co. in St. Louis, a subsidiary of Richmond, Va.-based LandAmerica Financial Group.

Mike Starrett, LandAmerica’s vice president of area agency management, was in Springfield with two of his company’s auditors the day after Guaranty shut down. Auditors will spend several days reviewing the company’s accounts, Starrett said.

“They’re cooperating in that regard,” he added.

Guaranty Title recently notified Land America about its plans to close for “financial reasons,” Starrett said.

He did not elaborate on the nature of the financial hardships facing the title company.

Other title agencies in Springfield are positioning themselves to pick up the slack created by Guaranty Title’s closure.

“They’re going to have thousands of policies out there that haven’t been issued (after closing),” said Keith Chaffin, operations manager and vice president at Hogan Land Title Co. “It’s going to be a big deal.”

Both Chaffin and Bob Clinkenbeard, manager at Fidelity Title Agency, have contacted LandAmerica as well as local lenders and real estate brokers about stepping in to close pending real estate transactions Guaranty Title had been handling.

“As far as Realtors and brokers, we’re just trying to call them and let them know, ‘Hey, if you’ve got something that’s pending that has to close, we’re here to help you out,” Clinkenbeard said. “We’ll be happy to rush a commitment through, squeeze a closing in.”

Disbursing money for commercial and residential construction loans tied to deeds of trust insured by Guaranty Title also is a concern, Clinkenbeard said. Title agencies act as an intermediary between banks and construction contractors by overseeing loan draws tied to specific projects, he explained.

“We’re almost like a payroll company,” Clinkenbeard said.

Guaranty Title is the region’s third-largest title company based on the number of full-time employees, according to Springfield Business Journal’s 2007 list of area title companies.

The agency had 45 employees in 9 closing offices, according to the list. Whether any Guaranty Title employees retained their jobs is unknown.[[In-content Ad]]