Frequently Asked Questions
Title Insurance – What is it?
Title Insurance is a contract to indemnify against losses arising through defects in the title to real estate. If the real estate title is insurable, the company guarantees against loss due to any defects in title not set forth in the title policy. It also pays all expenses in defense of any lawsuit attacking the title as insured.
Who needs it and why?
All persons who purchase real property, refinance their home, or make a loan against real property should have title insurance, especially if they want to sleep soundly at night with the assurance that they won’t lose money or their entire interest in the property if some problem is later found which endangers their position or priority in the property.
Unknown liens and encumbrances are found all the time, even when a property has been closed before by a title company or owned by one owner without problem for a substantial period of time. County records are not always accurate, and people and other entities file liens, judgments, etc., when the unsuspecting owner has no knowledge of them, just to mention a few of the things we frequently find when researching titles.
What Does the Title Agency Do To Protect You?
Professional Title Solutions, Inc. first conducts at Title Search, which involves examining all public records that relate to the property. Prior deeds must be examined as well as a full search and examination of any prior mortgages, liens and encumbrances against all prior owners. There are a number of other items that may be encountered in the search process. Each of those items must be fully evaluated.
Questionable title issues must be evaluated by a staff attorney provided by the title underwriter. Less problematic issues and matters can be corrected and handled by the title agent or the attorney owner of the agency. Once title is deemed clear and there are no questions or other issues that will cause later problems to our customers, the matter is closed at the title agency (or by mail if parties are not in town). A closing involves the preparation of deeds, affidavits, closing statements, agreements and informational documents, and the additional preparation of checks or wire transfers to dispose of all closing funds. All documents must be signed by the proper parties and accounted for. Then, documents that need to be recorded are sent to the proper governmental recording authority without delay. Receipt back of all recorded documents must be calendared to make sure all requirements of recording have been met.
Once all requirements of the closing and title commitment have been met, a title policy is prepared and sent to the insured parties. The title policy protects the customer from errors and omissions in the public records, unrecorded liens or hidden defects not disclosed in public records such as forged or fraudulent documents and even heirs or prior parties with interests in the property who may make claims against title.
What Does Title Insurance Protect Against:
he following are some of the most common risks that could cause a problem if one is not protected with a policy of title insurance:
- Forged deeds, mortgages, mortgage satisfactions or releases Fraudulent persons who pose as a seller, mortgage holder or lien holder
- Prior unknown heirs
- Liens from unpaid estate claims or from prior owners
- Defective Deed executions; missing witness signatures; incorrect notarizations
- Incorrect or no recitations of marital status on prior deeds
- Legal description errors; other scrivener’s errors
- Wild Deeds (someone recording a deed with your legal description on it)
- Wild Mortgages (someone recording a mortgage with your legal description on it)
- Incorrect indexing of a document by a court clerk
- Special assessments previously missed
- Incorrect identification of easements
- Fraud, duress, or coercion involved with prior signed documents
- Documents signed by persons mentally incompetent