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WHAT IS A TITLE COMPANY?
Lenders (Banks, Mortgage companies and Brokers), Real Estate Agents or Individuals, hire Title Companies to verify the legal right and authority of the seller to transfer the property to the buyer or to verify their borrower (who is refinancing) has the legal right to mortgage (encumber) the property.
WHAT IS TITLE INSURANCE?
Title Insurance ( a Lender's "Loan Policy") is like any other type of insurance. It insures the Lender they are in the lien position they requested as a condition of the loan. Lien Position means the order (as if you were standing in line) of who gets paid if the property is sold or lost/destroyed. An Owner's Policy, protects the owners, for life, from law suits brought against them pertaining to "defects/flaws" of title.
WHO SELECTS THE TITLE COMPANY?
You, the Consumer, have the right to choose the Title Company. If you do not choose or have no preference, your Real Estate Agent will most likely choose one for you. If neither you nor your Real Estate Agent has a preference, the Bank/Lender will choose the Title Company.
WHAT IS THE PROCESS?
1. The first communication we receive from the loan officer is a faxed title order.
The only information contained in the taxed title order, are: Borrower's names and the address of the property.
a) Besides names, we need the following information in order to complete the title process in a timely fashion:
b) We also need the name(s) of the Seller(s):
c) If the buyer or the seller is using a Realtor, we need their Name(s) & Phone Number(s).
2. A Completed Title Exam requires 24-72 hours to complete
A title exam is the legal examination of the property in question, (i.e. who has a claim to the property, who is owed money by the property), the sellers (who do they owe money to and does this debt affect their ability to sell the property), and the buyer.
3) Commitment:
A summary of the legal condition of the property, based upon the above search, given to the lender stating the requirements to close the loan. This is only given to the lender because they are the ones being insured, you are entitled to a copy if you request an Owner's Policy of Title Insurance.
4) Title Clearing:
We the title company now spend time trying to clear any problems the property might have. We cannot however, represent the seller or the buyer for the purpose of clearing the title. We the Title Company represent the Lender. There are times; the buyer, seller, or borrower may have to hire their own attorney to clear up certain title problems.
5) Ask for Written Payoffs of Seller's Recorded Debts:
We must have written proof of how much it will cost to payoff existing mortgages and other liens. Those liens which are held by private individuals will also require we obtain a signed Release and Satisfaction prior to or at the closing.
6) Closing
a) Scheduling your closing:
b) Document preparation
c) Calls and Faxes
d) Explanation and Execution of documents (brief)
e) Lenders Title Insurance vs. Owners Title Insurance
f) Collect the closing Funds & Documentation.
g) Dry Closing
h) Disbursement
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