|
myClosingSPACE.com wants consumers to understand what title insurance is and to understand the entire title insurance and closing process. Below are answers to some of the common questions that consumers' have concerning title insurance. If you need further clarification or have additional question please contact the myClosingSPACE.com customer service and one of our representatives will be happy to assist you.
What is title insurance and why do people need it?
Title insurance and the search and examination process that takes place before a policy is issued, assures the home buyer that the title to their property is clear and they are protected from any future challenges to their title.
How is a title search conducted and what are the typical problems we look for?
A typical title examination includes the search of numerous public documents, including tax records, court judgments, prior deeds and encumbrances, and federal and state records. The title agent is looking for things like prior mortgages, judgments, liens, street and sewer assessments, special taxes and levies, and numerous other matters that could affect the status and marketability of the title.
Why do homeowners have to purchase title insurance on a refinance if they already purchased it when they bought their home?
Lender's title insurance (the Loan Policy) expires when the mortgage loan is paid off. When a homeowner refinances, the old loan is essentially paid off and a new loan issued. Hence, the lender will require a new Loan Policy to ensure that no title issues have occurred since the last policy was issued. Homeowners should ask about reissue rates, especially if the previous title policy was issued within the last ten years. On a refinance, there is no need to purchase a new Owner's Policy.
What's the difference between a Loan Policy and an Owner's Policy?
A Loan Policy is issued in the amount of the mortgage loan to assure the lender's priority position on the lien and expires when the loan is paid off. An Owner's Policy protects the owner's investment in the property for as long as they or their heirs have an interest in the policy.
Why should someone buy title insurance when claims are so rare?
Claims are rare exactly because of the search, examination, and curative work performed by title professionals before the property changes hands. This curative work represents approximately 80% of the premium. One out of every three title searches reveals a problem that must be corrected by the title company before the sale can close. Only about 20% of the premium goes to the actual title insurance policy, a significant portion of which is put into reserves for claims that could occur 10 or 20 years in the future.
Haven't advances in technology made it easier to do a title search and shouldn't prices reflect that?
A title search is not like doing a Google search. There are more than 3,000 counties, parishes, and independent cities in the United States. Only 10-15 percent of these counties have automated title files, so in the vast majority of the country, the data retrieval process is highly manual and paper based.
What is an agent commission?
Agent commissions are more properly describes as agent's labor or fees for services performed. This includes conducting the title search and examination, repairing title defects, issuing the insurance policy and, oftentimes, conducting the closing or settlement.
What about all of the news reports of "illegal kickback" and sham title companies forming affiliated business arrangements with real estate agents?
In truth, every industry has its share of "bad apples." And whether there is an illegal referral fee being paid, or outright fraud being perpetrated, the industry fully supports the prosecution of these individuals to the full extent of the law.
*Copyright ALTA (American Land Title Association)
If you are in the market for title insurance get a "Quick Quote" from myClosingSPACE.com today.
|