Title is the chain of ownership from the original property owner, to the present property owner. This record is normally maintained by the county clerk’s office in the county where the property is located. Title insurance provides protection for owners, lenders, and buyers against any type of liens that have been placed upon the property. When you purchase your home, title insurance assures there is no problems with its title.
To protect possibly the most important investment you’ll ever make. Title insurance protects the purchaser or owner from loss that may arise as a result of a defect in your ownership. The title insurance company agrees to represent you in court if there is an defect on your title. With a title insurance policy, the owners, has an indemnity contract that will cover you for loss in the event someone asserts a claim against your property that is covered by the policy.
After a careful title examination of public records, problems could still arise. Even the most thorough search cannot absolutely assure that no title issues are present. Despite an examination of an experienced and knowledgeable title examiner, other title problems may still exist that a search may not discover.
The following are a few of the most common problems that could cause loss of title.
Yes, when you purchased your home you purchased title insurance to protect yourself from losses. You also purchased lenders title insurance to insure your lender from losses. When you refinance you are issued a new policy, and the current mortgage is paid off. Anytime a new loan is obtained and the current loan is paid off, a new title insurance policy is required for the new mortgage policy. This is required by the lender.
The “closing” or the “settlement” as it is commonly referred is a transfer of property from the seller to the buyer.
The process begins once the seller accepts the potential buyer’s sales contract. The buyer then selects a settlement agent to prepare the documents for the closing. In most cases the buyer retains an attorney or has the title company serve a settlement agent.
Once a settlement agent is selected they will handle the closing process from there. The settlement agent will then request title. A title professional will search and examine title records for the property. Two types of things they are looking for are to make sure the current owner is up to date on all taxes and that there are no outstanding mortgages or judgments. It is the title professional’s obligation to deal with and resolve any issues that are discovered prior to reaching the closing table. If the sales contract calls for a prior mortgage to be paid off, the settlement agent will order payoff figures from the existing lender. If the buyer is assuming the mortgage, the settlement agent will oversee that process as well.
If required to do so (by the lender) the agent can order property inspections, termite reports, and a survey if needed. Once all of the aforementioned items are addressed, the settlement agent can begin to prepare the HUD-1 settlement statement.
On the day of the closing, the property will be transferred from the seller to the buyer. You will most likely sign a number of documents that will be explained to you by your settlement agent. Once all of the paper work is completed, and explained you are done. What happens next is the settlement agent is required to send payment to any prior lender, pay all of the other parties who preformed services in connection with your closing, pay any net funds to the seller, Finally record the deed and mortgage and any other documents in connection to the settlement. This will all be handled by your settlement agent.