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California eyes REO escrow selection

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A bill aimed at preventing banks from dictating the escrow service to be used in transactions involving real estate-owned (REO) properties is expected to reach California Gov. Arnold Schwarzenegger's desk following its approval by the state Senate.Assembly Bill 957, which passed the Assembly in a unanimous 77-0 vote in May, was approved by the Senate on Sept. 1 in a 29-to-4 vote. Because the bill was amended, it must now go back to the Assembly for concurrence before going to the governor's desk. As an urgency measure, the bill can take effect immediately if the governor signs it into law.The bill's author, Assemblywoman Cathleen Galgiani, D-Livingston, claims banks and the federal Department of Housing and Urban Development (HUD) increasingly require the use of specific settlement-service providers when they are the seller of residential property.Local escrow companies "are being shut out of the (REO) housing market," Galgiani said in a press release.  "Instead of loca...