Tag Archives: Title insurance in the United States

Forms! We Have Forms!

15 Mar
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Importance of the Title Commitment

10 Mar

When you are purchasing a home (or any type of property) the last thing you are thinking about (unless you are a real estate attorney) is the title commitment. The focus is generally on the big ticket items such as purchase price, closing date, and inspection contingencies. However, almost every real estate purchase agreement provides for the issuance of a title insurance policy to the buyer (and buyer’s lender if applicable) and the title commitment is the title company’s promise to issue a title policy to you at closing. So why is the title commitment so important and why should you review it carefully?

In preparing the title commitment, the title company will research the public records and exclude from coverage under the title insurance policy items that affect title to the property. These excluded items are called exceptions. Common examples of exceptions on the title commitment are liens, mortgages and easements. A thorough review of the title commitment by you (or your legal counsel) will allow you to properly assess the state of the title to the property and determine which exceptions must be removed and which exceptions can stay. Absent your review, you will take title to the property subject to those exceptions listed in the title commitment and, if an issue arises in the future, the title company will not provide coverage under the title insurance policy with respect to those items.

The title commitment also serves as a check on a seller’s statements or representations regarding the state of the title of the property. In some cases, a seller may simply be unaware of the exceptions affecting the property. Rely solely on the seller’s statements to your detriment. The title commitment will bring those exceptions to light. Once identified, your purchase agreement should provide a mechanism for the buyer to object to items on the title commitment and have the right to terminate the agreement if the seller refuses to remove any objectionable exceptions such as a mortgage.

 

3/9/2016 JDSupra Business Advisor
by Brian Bonham,  Wickens, Herzer, Panza, Cook & Batista Co

The Value Of A Competent Title Company: Avoid Problems In Closing

21 Jan

From 


Consumer protection agency wants to know about snags that arise in real estate closings

By , Published: January 9 | Updated: Friday, January 10, 9:40 AM

The federal government has a question for consumers who have bought or refinanced homes, a question that’s certain to generate more than an earful or replies: Were there any problems when you went to close the deal?

Any last-minute glitches or surprises that delayed the settlement, required unexpected negotiations or, worst of all, blew up the sale or refi? Did you get your settlement sheet in advance so that you could review the documents intelligently? Were there any errors or discrepancies that popped up — charges that were considerably higher than you had expected, loan-related fees or an interest rate that differed from what you thought you had signed up for? Was the whole process pleasant? Was it “empowering”?

Wow. Talk about stirring up hornets. The Consumer Financial Protection Bureau, which has broad regulatory powers in the real estate settlement arena, wants to know whether there are common problems that need to be fixed. If so, it may make what it euphemistically calls “interventions” in order to right what seems to be wrong.

The bureau also wants to hear from realty professionals, lenders, title insurance and escrow agents, lawyers and others who play roles in closings on homes — the people who produce, bless and witness the signings of mounds and pounds of paper associated with the settling of America’s home transactions.

From industry accounts, the vast majority of closings are successful. The National Association of Realtors estimates that roughly 10 to 12 percent of all pending sales don’t close, for various reasons. But conversations with agents suggest that a much higher percentage of settlements experience problems that arise just before or during the event, snags that either delay or complicate the process.

Though eleventh-hour delays can occur because of issues related to title insurance and other factors, a disproportionate number appear to be related to the mortgage. Late in the game, the lender might inform the borrower: Sorry, but we’ve encountered some underwriting red flags in your application that you’ll need to resolve before we can proceed. Or oops, we didn’t get all the loan documents to the closing agent in time. Or worst of all, we’ve changed our mind. We simply cannot do this loan and we sincerely regret that we’re telling you this on the day before your scheduled closing.

Gary Kassan, an agent with Pinnacle Estate Properties in Valencia, Calif., says that he routinely gets buyers preapproved by lenders but that in at least 20 percent of purchases, problems that threaten to delay or disrupt closings pop up after the preapproval. In early January, Kassan was waiting for a lender to agree to close on a deal that had originally been scheduled for late December. The problem: underwriters’ questions about the borrower’s income that arose late in the process.

“I want to ask all these [loan officers] ‘Why didn’t you bring this up earlier, before you gave [my client] a preapproval letter?’ ”

Cindy Westfall, an agent with Premiere Property Group in the Portland, Ore., area, has had two recent sales knocked off track by underwriting issues just before the closing; one of them caused the entire sale to blow up, forcing her buyers to start their home search all over again. “My clients were very stressed” by the entire experience, she said in an interview.

Rhonda Masotta, an agent with Bright Realty in Sarasota, Fla., almost found herself in the same situation: Last year, she was sitting at a table for her buyer’s closing on a $1.25 million home. The only thing missing was one essential item: confirmation that the bank committed to do the loan had wired the money needed to complete the transaction.

“We all waited for hours,” but there was no word from the bank, Masotta said. The closing was rescheduled for the following day, but then came the bad news: The bank had decided to back out of the deal. That’s usually a death sentence on a home sale, but Masotta and her colleagues on both sides of the transaction opted for an emergency rescue attempt and found a bank willing to underwrite and fund the loan on an expedited basis later the same day.

That’s not the way closings are supposed to work, but stuff happens.

If you want to share your experiences with the Consumer Financial Protection Bureau, e-mail your account by Feb. 7. Detailed instructions for submitting comments — and postings of comments made to date — are online in the Jan. 3 Federal Register, at www.federalregister.
gov
.

Ken Harney’s e-mail address is kenharney@earthlink.net.

What homebuyers need to know about title insurance

12 Sep

At some point during your homebuying process, the topic of title insurance is likely to come up. Like most types of insurance, title insurance is better to have and not use than need it and not have it available. But what is it, why do you need it, and how does it work?

 

What is title insurance?

 

Title insurance is a specialized insurance policy that protects you and your mortgage lender against mistakes made in a title search. If you find a home and there’s not a clear title to it, title insurance protects the bank – and you – if there’s a problem. A clear title means you’ll be able to occupy and use the property the way you want, and that you’re able to sell or pledge your property as security for a loan.

 

There are generally two types of title insurance: lender’s and owner’s title insurance. The lender’s policy is usually based on the dollar amount of your loan and protects the lender’s interests in the property against a problem with the title. The policy coverage decreases each year and goes away as the loan is paid off.

 

As its name suggests, the homeowner buys owner’s title insurance, which is in the amount of the real estate purchase, for a one-time fee at closing. It lasts as long as you own or have an interest in the property. Owner’s title insurance fully protects the homeowner in the event that there’s a problem with the title that wasn’t discovered during the title search. This type of insurance also pays for any legal fees involved in defending a claim to your title. Think of owner’s title insurance as helping to protect your equity, or your investment, in a home.

 

 

Title insurance is a safeguard against loss arising from hazards and defects already existing in the title. While claims on title insurance are rare compared to other types of insurance, they still happen and can be complicated legal issues to fix.

 

For example, one of the most common title-insurance claims is for the cost of back property taxes that the title company missed in researching a sale. Another example is when there’s not a clear title to the house, especially in cases of divorce. These scenarios might sound minor, but they can cost thousands in fees without title insurance.

 

Are you buying a newly built home and think there’s a clear title? Many consumers think they’re the first owner if they’re building a home on a lot, but it’s just as likely there were prior owners of the land. A title search will uncover any existing liens, and a survey can determine the boundaries of the property you’re buying for your new house.

WSJ: Consult a Title Professional

23 Apr
THE WALL STREET JOURNAL

Know Your Rights When Buying Real Estate

 

Consult a Land Title Professional and Purchase Title Insurance

 

WASHINGTON--(BUSINESS WIRE)--April 16, 2013--

As the spring home buying season begins, the American Land Title Association (ALTA) reminds consumers of the importance of title insurance when purchasing real estate and protecting their rights to property.

 

“For most Americans, our home is the single largest financial investment we make,” said ALTA president, Frank Pellegrini. “More importantly, it’s where we raise our families, share time with friends and live our lives. While ownership of our home may seem very straightforward, our rights to enjoy our property aren’t always as clear.”

 

Homeowners can purchase, for a one-time fee, an owner’s title insurance policy, which insures that consumers are protected in the case of known liens or encumbrances, such as unpaid mortgages, property taxes or child support liens.

 

“Title insurance professionals research the history of a property by scouring through public records to determine whether title problems exist,” said Pellegrini. “When a title professional finds an issue, they work to resolve it– typically without the consumer even knowing about it.”

 

ALTA, the national trade association of the land title insurance industry, encourages consumers to shop for their own title professional or title company. Homebuyers can also ask their real estate agent or lender for a recommendation.

 

 

 

 

 

About ALTA

 

The American Land Title Association, founded in 1907, is a national trade association representing nearly 4,200 title insurance companies, title agents, independent abstracters, title searchers, and attorneys. ALTA members conduct title searches, examinations, closings, and issue title insurance that protects real property owners and mortgage lenders against losses from defects in titles.

 


 

 
    SOURCE: American Land Title Association (ALTA) 
Copyright Business Wire 2013

Insurance News – American Land Title Association Introduces Set of ‘Title Insurance and Settlement Company Best Practices’ [Professional Services Close – Up]

19 Jan

Click on the link below:

 

Insurance News – American Land Title Association Introduces Set of ‘Title Insurance and Settlement Company Best Practices’ [Professional Services Close – Up].

What Is ALTA, and What Do They Do?

6 Dec

The American Land Title Association, founded in 1907, is a national trade association representing more than 4,000 title insurance companies, title agents, independent abstracters, title searchers, and attorneys. ALTA members conduct title searches, examinations, closings, and issue title insurance that protects real property owners and mortgage lenders against losses from defects in titles.

ALTA publishes an analysis every quarter, covering market share and volume of premiums generated.  Third quarter 2012 they reported a 22 percent ($581 million) increase in operating income from the third quarter of 2011, while loss expense was down 27 percent ($81 million) and operating expenses increased 23 percent ($532 million).

“Title insurance premium volume is highly dependent on real estate sales and mortgage-refinancing activity,” said Michelle Korsmo, ALTA’s chief executive officer. “The third quarter of 2012 continued to show improvement in our industry as it was the third consecutive quarter with an increase over the equivalent 2011 quarter.”

New York was one of the stated demonstrating a significant increase in volume($213.8 million, up 15.8 percent) as was Pennsylvania ($130 million, up 44.6       percent).