Tag Archives: Title insurance

Forms! We Have Forms!

15 Mar

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

Caveat emptor!

27 Jul

Communities Digital News published an article about home and car buying on July 26th.  They make a number of valid points about both, including the following about title insurance:

 

Insurance protects you in two ways. First, “title” insurance protects your ownership of the property. Wouldn’t it be a bit troubling to learn three months after you have moved in that the seller did not own the property, and now, neither do you, because the real owner never sold it? Having a title search done through the local land records is vital to assure proper ownership and title to the property. The title search process can also alert you to any liens (claims against the property) and easements (rights others have to the property) of which you may not have been made aware. Title insurance protects you against all of these possible problems.

What to do – Make sure a title company searches the land records and is prepared to issue a title insurance policy.

 
Read more at http://www.commdiginews.com/business-2/buying-cars-and-homes-legal-and-financial-considerations-45586/#kb12lcIspgIArZoX.99

Realtors and lenders confused about value of title insurance, says ALTA. Title industry group urges collaboration with real estate, lender partners before rule change

28 Apr

Realtors and lenders are just as ignorant as the general public about what title insurance is and the value it provides to the homebuying process, according to the American Land Title Association.

And with the sweeping changes that the Consumer Financial Protection Bureau’s TILA-RESPA Integrated Disclosures (TRID) rule will bring to the closing process later this year, more educational efforts and outreach are critically important, ALTA stressed at its 2015 Business Strategies conference last week.

Title insurance protects buyers from problems that could arise with a title they have purchased that were not uncovered in the title search process. Those problems could include errors with the deed or mistakes in the record — or even forgery or undisclosed heirs. When a homeowner purchases title insurance, then the title company will help pay any valid claims or defend the homeowners’ claim in a lawsuit.

The TRID rule, which takes effect Aug. 1, is widely considered to be the most significant change to the closing process in four decades. The 1,888-page rule and its accompanying 400-plus regulatory citation changes will impact how closings are conducted and the time frame in which they occur, as well as business processes, technology, policies and procedures — and, as highlighted at ALTA’s conference, the relationships among various vendors.

“Collaboration begins now,” said ALTA President Diane Evans as she kicked off the annual conference, attended by more than 500 title insurance and settlement professionals March 18-20 at the Sheraton Hotel in downtown Philadelphia. “We’ve been slow to engage, and now the time is critical that we start talking about the importance of the work we do. You will leave here with the tools to talk to Realtors and lenders to engage in critical conversations that need to occur sooner than later, and to collaborate with them as they prepare for Aug. 1.”

Evans, who is also vice president of Land Title Guaranty Co. in Denver, said during ALTA’s research for its consumer messaging campaign last year, Realtors and lenders who participated in focus groups showed “confusion” about the value of title insurance.

“Few recognized that we have two types of policies,” Evans said. “We learned they lacked a clear understanding of what we do, what we insure, how we price our products.”

We’ve been slow to engage, and now the time is critical that we start talking about the importance of the work we do.” Diane Evans, president of the American Land Title Association
The real estate professionals said title insurance professionals need to sell their own product — “It’s not up to them,” Evans said.

“It is up to us to take the reins and communicate directly to consumers earlier in the homebuying process to ensure they will have the peace of mind that their investment is protected after they get the keys to their home,” she said.

Part of the confusion stems from the CFPB’s decision to label an owner’s title policies as “optional,” she said.

“A consumer’s largest investment — their home, the very product that provides the most secure financial coverage for that home — and it’s optional,” she said. “Does that bother you? Are you concerned? I am. We now are tasked with making sure that consumers are educated early on in the process when they are buying their home. We have an obligation to make sure they understand the loan process, but we’ll have the opportunity to talk to them early on, and that part of the loan process includes protecting that investment. Why, for the one-time fee that we charge, it may be the single most important safeguard they purchase. We get to sell that to them and help them understand why it’s important.”

But because the CFPB will require lenders to assume responsibility for all of its closing table partners, it “will become critical to have leadership conversations” with Realtors, lenders and other vendors, Evans said. She urged title insurance and settlement professionals to educate their partners about the work they do to minimize claims and the risk homebuyers may have on their investment.

“We want to make sure they understand that the one-time premium gives them that peace of mind,” she said.

Evans urged attendees to take the lead and start “setting the expectations and having conversations with lenders” and other partners on how they will collaborate to exchange information on the new TRID disclosure forms.

“Every one of you in this room is going to become leaders in your community, in your market. You will help define and set the expectations in managing the next new paradigm shift in real estate closings,” she said.

Acknowledging the challenges that lay ahead in the next five months as everyone prepares for implementation, Evans said she expects everyone involved in the real estate, mortgage and settlement service industries to “morph, change and adapt to make practical applications and solutions for real-world problems.”

“I think we’ve got a lot of challenges ahead of us,” she conceded. “I think after Aug. 1, after we’ve experienced many of those pressure points, we will absolutely find a way to accommodate those changes.”

ALTA is co-hosting several TRID forums along with the Mortgage Bankers Association and National Association of Realtors to train members on the changes to come. Two forums remain, but are sold out: March 26 in Chicago and April 16 in Washington, D.C.

from INMAN.com March 24, 2015

Realtors and lenders confused about value of title insurance, says ALTA

30 Mar

from INMAN March 24, 2015
Realtors and lenders are just as ignorant as the general public about what title insurance is and the value it provides to the homebuying process, according to the American Land Title Association.
And with the sweeping changes that the Consumer Financial Protection Bureau’s TILA-RESPA Integrated Disclosures (TRID) rule will bring to the closing process later this year, more educational efforts and outreach are critically important, ALTA stressed at its 2015 Business Strategies conference last week.
Title insurance protects buyers from problems that could arise with a title they have purchased that were not uncovered in the title search process. Those problems could include errors with the deed or mistakes in the record — or even forgery or undisclosed heirs. When a homeowner purchases title insurance, then the title company will help pay any valid claims or defend the homeowners’ claim in a lawsuit.
The TRID rule, which takes effect Aug. 1, is widely considered to be the most significant change to the closing process in four decades. The 1,888-page rule and its accompanying 400-plus regulatory citation changes will impact how closings are conducted and the time frame in which they occur, as well as business processes, technology, policies and procedures — and, as highlighted at ALTA’s conference, the relationships among various vendors.
“Collaboration begins now,” said ALTA President Diane Evans as she kicked off the annual conference, attended by more than 500 title insurance and settlement professionals March 18-20 at the Sheraton Hotel in downtown Philadelphia. “We’ve been slow to engage, and now the time is critical that we start talking about the importance of the work we do. You will leave here with the tools to talk to Realtors and lenders to engage in critical conversations that need to occur sooner than later, and to collaborate with them as they prepare for Aug. 1.”
Evans, who is also vice president of Land Title Guaranty Co. in Denver, said during ALTA’s research for its consumer messaging campaign last year, Realtors and lenders who participated in focus groups showed “confusion” about the value of title insurance.
“Few recognized that we have two types of policies,” Evans said. “We learned they lacked a clear understanding of what we do, what we insure, how we price our products.”
We’ve been slow to engage, and now the time is critical that we start talking about the importance of the work we do.” Diane Evans, president of the American Land Title Association
The real estate professionals said title insurance professionals need to sell their own product — “It’s not up to them,” Evans said.
“It is up to us to take the reins and communicate directly to consumers earlier in the homebuying process to ensure they will have the peace of mind that their investment is protected after they get the keys to their home,” she said.
Part of the confusion stems from the CFPB’s decision to label an owner’s title policies as “optional,” she said.
“A consumer’s largest investment — their home, the very product that provides the most secure financial coverage for that home — and it’s optional,” she said. “Does that bother you? Are you concerned? I am. We now are tasked with making sure that consumers are educated early on in the process when they are buying their home. We have an obligation to make sure they understand the loan process, but we’ll have the opportunity to talk to them early on, and that part of the loan process includes protecting that investment. Why, for the one-time fee that we charge, it may be the single most important safeguard they purchase. We get to sell that to them and help them understand why it’s important.”
But because the CFPB will require lenders to assume responsibility for all of its closing table partners, it “will become critical to have leadership conversations” with Realtors, lenders and other vendors, Evans said. She urged title insurance and settlement professionals to educate their partners about the work they do to minimize claims and the risk homebuyers may have on their investment.
“We want to make sure they understand that the one-time premium gives them that peace of mind,” she said.
Evans urged attendees to take the lead and start “setting the expectations and having conversations with lenders” and other partners on how they will collaborate to exchange information on the new TRID disclosure forms.
“Every one of you in this room is going to become leaders in your community, in your market. You will help define and set the expectations in managing the next new paradigm shift in real estate closings,” she said.
Acknowledging the challenges that lay ahead in the next five months as everyone prepares for implementation, Evans said she expects everyone involved in the real estate, mortgage and settlement service industries to “morph, change and adapt to make practical applications and solutions for real-world problems.”
“I think we’ve got a lot of challenges ahead of us,” she conceded. “I think after Aug. 1, after we’ve experienced many of those pressure points, we will absolutely find a way to accommodate those changes.”
ALTA is co-hosting several TRID forums along with the Mortgage Bankers Association and National Association of Realtors to train members on the changes to come. Two forums remain, but are sold out: March 26 in Chicago and April 16 in Washington, D.C.

Why Do I Need Title Insurance?

27 May

What is the purpose of Title Insurance? First let’s take a look at what “Title” means to get a better understanding of Title Insurance:  it is the legal right to possession of ownership. Title insurance protects the holder from any losses sustained from defects in the title. In other words, title insurance protects the Buyer or new owner in case there is anything wrong with the previous possession of ownership. Most mortgage lenders require Title Insurance.

It protects your rights to your home. Whether you are buying a home with cash or mortgage, it protects you from fraudulent claims and mistakes made in earlier sales. Title Insurance is a one-time cost and is usually paid for by the Seller. But never assume this to be true as it may vary depending on how it is negotiated in the contract.

Lenders also require Title Insurance for any refinance, including a Reverse Mortgage.

When you buy a home it is important to have a good Title company to do an extensive search at an affordable rate. The Closing Company or Attorney which will coordinate the closing of your home normally runs a Title search for you. An experienced Title officer will review and analyze all the documents from the search. They will determine the status of title for the title insurance policy.

There are typically 2 types of Title Policies you should be aware of: Lender title policies, which protect the lender, and owner title policies, which protect you.

Tradition Title Agency has been providing Title Insurance for over 20 years – trust the agency with experience and knowhow!

Q & A with America’s Real Estate Professor: Title insurance on refinance

4 Dec

from Norwalk Reflector Dec 2, 2013

Title Insurance on Refinance

 

Q. I just received my closing statements from my refinance and it looks like I had to purchase another title insurance policy. I’m pretty sure I bought one when I purchased the property, why do I have to buy another? Michael L.

 

A. Title insurance protects you, the buyer, for issues that could affect the title; that occurred before you purchased the property. These could be items like liens, ownership disputes and unpaid taxes. When you acquired the property, a policy was purchased protecting you. Many times the seller pays for this policy but it’s negotiable; and you bought a policy for the lender.

 

Yes, it seems foolish to purchase two policies covering the same thing, but you have no choice because your bank demands its own policy protection. Also, the policy you purchase for the bank is generally only for the mortgage amount, whereas the policy from the seller at closing is generally for the entire purchase price.

 

Now that you are refinancing, you get to buy a new policy for a new lender. Even if it is the same lender, you still get to buy a new policy. This new policy covers the period before you purchased the property, plus the time you’ve owned the property up until the date of refinancing, and any increased loan amount.