Title insurance is different from other types of insurance.
* It doesn’t cover any future casualties, such as homeowner’s, auto, or health insurance.
* Title insurance protects policyholders against past events, such as liens that have not been paid off, mortgages that have never been satisfied, and deeds signed by only one party with a vested interest. Title insurance, technically speaking, is a policy of insurance which guarantees that the insured property is free from any claims after the policy’s effective date. A real estate title refers to the right to possess, use, and own that property. It is the foundation of property ownership.
* Title insurance protects the insured against any claims that might be made against their ownership right. It is standard for the Seller to give to the Buyer a policy titled insurance when ownership of a property is being transferred. This assures the Buyer that there are no known defects or encumbrances. You can also buy a property without title insurance to better understand the concept of title insurance.
* How could you be certain that your mortgage would be paid off?
* How do you know if there are no other mortgages or that taxes from the previous years have been paid?
* How do you find out if there are no judgments against the Seller attached to the property? These issues can be investigated using a Title Search and Examination. It is a search of public records that uncovers information about the property.
It is the first step in issuing a title insurance policy. After the examination and search are completed, we issue a commitment for title insurance.
*The commitment describes all that was found in the title search and is a binder promising to issue a policy of title insurance when all requirements are met.
* These requirements include recording a deed from current owners, recording payment and recording satisfaction of current mortgages, etc. After the required documentation has been recorded, the actual Policy of Title Insurance will be issued.
* The Commitment guarantees that the new owner has met all conditions.
* It does more. The owner is also guaranteed that no hidden encumbrances are attached to the title. The policy holder is guaranteed that the property is free from any recorded liens or encumbrances, unless it is specifically stated as an exception.
WHAT HAPPENS AFTER CLOSE?
The Title Company has much more work ahead of it after the closing.
* The Lender must first have all documents signed in order. These documents must be returned to the Lender within 24hrs. Payoff of existing mortgage(s) must be sent or delivered as soon as possible. The deed and mortgage must also be recorded.
* This usually happens within 24 hours after closing.
* Real estate taxes may sometimes need to be paid. A representative from our company will deliver the payment directly to the Tax Collector. Recording a document means that the Clerk at the Circuit Court copies the original document, and the copy is added to the permanent records.
* Every page in a document is recorded in a book. Each page is assigned a page number.
* The page and book number are stamped in the margin of the original document. The Title Company usually returns the documents after they have been recorded.
* After the recordings are returned, the title work will be updated to ensure that nothing was recorded in the “gap period” and verify the numbers recorded on the documents.
* The final title update should also include the satisfaction of the mortgage. After this, the final Policy of Title Insurance will be issued.
* The form is completed and mailed to the new property owners or their lender.
* The final policy should be received between 6-10 weeks after closing.
