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Frequently Asked Questions |
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6. What is Title Insurance?
Title insurance is insurance against loss from defects in title to real property and from the invalidity or unenforceability of mortgage liens. It is meant to protect an owner's or lender's financial interest in real property against loss due to title defects, or liens. It will defend against a lawsuit attacking the title as it is insured, or reimburse the insured for the actual monetary loss incurred, up to the dollar amount of insurance provided by the policy.
7. What is an Owner's Title Policy?
The owner's policy insures a purchaser that the title to the property is vested in that purchaser and that it is free from all defects, liens and encumbrances except those which are listed as exceptions in the policy or are excluded from the scope of the policy's coverage. It also covers losses and damages suffered if the title is unmarketable. The policy also provides coverage for loss if there is no right of access to the land. Although these are the basic coverage, expanded forms of residential owner's policy exist that cover additional items of loss.
8. What is a Lender's Title Policy?
The loan policy protects the lender against loss due to unknown title defects. It also protects the lender's interest from certain matters, which may exist but may not be known at the time of sale. This policy only protects the lender's interest. It does not protect you. That is why you need an owner's policy, which can be issued at the same time as the loan policy for a nominal one-time fee.
9. What can the title company you choose do for you?
A title search is ordered which is a detailed examination of the historical records concerning a property. These records include deeds, court records, property and name indexes, and many other documents. The purpose of the search is to verify the seller's right to transfer ownership, and to discover any claims, defects and other rights or burdens on the property. A title must be deemed "good and marketable" before the settlement process can continue. The results of the title search identify (among other things): the current owner of the property; any liens on it; and any limits on how an owner can use the property. Title professionals will then examine the title search report to determine what—if anything—must be done in order to clear the title to the property so that the buyer can obtain their (and lender's) goal of a "good and marketable" title. A commitment is issued next promising to insure the new mortgage company. The closing agent then receives the closing package from the lender, works the Hud-1 and then off to signing all documents involved in the real-estate transaction.
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