Regarding Title Insurance
Below is a list of our frequently asked questions regarding title insurance and short sales. If you have any other questions, give us a call today at 410.992.1070 for more information.
Regarding Title Insurance
What is a title?
A title is the foundation of property ownership. It is evidence of the owner’s right to possess and use the property.
What is title insurance?
There are two types of title insurance. One type of policy covers the lender. The other policy type covers the owner. The Lender’s policy is a separate policy, protecting the lender’s interest in the property up to the outstanding balance of the buyer’s mortgage. The lender requires that the buyer purchase a Title Insurance Policy on behalf of the lender. The loan policy protects the lender against loss due to unknown title defects. This policy protects only the lender’s interest; it does not protect the buyer. The owner’s policy protects against loss due to any of the problems mentioned above. Even a “hidden hazard” can result in a claim against your ownership. The Enhanced Owner’s coverage includes coverage for zoning, subdivision, building permit and encroachment issues, as well as the coverage for certain post-policy matters such as theft of identity, forgery, and neighbor encroachment. Owner’s coverage provides legal defense and any liability or loss that may arise. The Enhanced coverage also allows for an increase in coverage as the property value increases, up to 150% of the policy coverage.
What does a title company do?
The job of the title company begins well before the settlement. We assemble information from many sources, including buyer’s and seller’s mortgage companies, land records and court records. We coordinate with all parties involved in the settlement. We look for any potential problems in the transactions and clear any judgments and/or liens against the parties prior to the transaction. At the settlement table, we collect and disburse funds from the transaction, transfer ownership of property and issue title insurance after settlement. The title company is also responsible for recording the Deed and Deed of Trust in land records. Additionally, we track and record the release of the seller’s mortgage.
Are there various ways to hold title to my property?
Yes, as a sole owner, joint tenants, tenants in common, or as tenants by the entirety. Consult with us prior to closing to discuss your specific situation.
What kinds of problems can a title search reveal?
A title search can show a number of title defects and liens, as well as other encumbrances and restrictions. Among these are unpaid taxes, unsatisfied mortgages, judgments against the current or prior owner, and restrictions limiting the use of the land.
Are there any problems that a title search cannot reveal?
Yes. There can be “hidden hazards” that the most diligent title searches don’t reveal. For instance, the previous owner may not have revealed that they were divorced, resulting in possible claims by judgment creditors. Other “hidden hazards” include fraud and forgery, defective deeds, claims against the property, mental incompetence, confusion due to similar or identical names and clerical errors within the courthouse records. These defects can arise after you have purchased your home and can jeopardize your right of ownership to the property.
Wouldn’t an abstract show property limitations and restrictions?
Yes or no. An abstract is a history of the property title as revealed by the public records. Abstracts may contain errors and do not disclose “hidden hazards” that can threaten your property title if you do not have a title insurance policy.
How does title insurance protect my investment if a claim should arise?
If a claim is made against your property, title insurance will, in accordance with the terms of your policy, assure you of a legal defense, in addition to paying all court costs and related fees. Also, if the claim proves valid, you will be reimbursed for your actual loss up to the amount of your policy.
How much could I lose if a claim is filed against my property?
That depends on the claim. In an extreme case, you could lose your entire home and property and still be liable to pay off the balance of your mortgage. Most claims are not that dramatic, but even the smallest, or fraudulent claim can cost you time, money and aggravation. You also have to pay costs for legal defense.
How much does title insurance cost?
Probably a lot less than you think. Charges vary in different areas of the country, but generally the cost of title insurance (including title abstract, examination and related services) amount to about one percent or less, of the cost of the property. And unlike other insurance premiums, which must be paid annually, a title insurance premium is paid once. Title insurance rates are set and regulated by the Maryland Insurance Commission. (If sellers have a current owner’s title policy the buyers may be eligible for a re-issue rate).
How long does my coverage last?
For as long as you or your heirs retain an interest in the property, and in some cases, even beyond.
Where can I get title insurance?
From any licensed title insurance company or its representatives operating in your state. When choosing a title insurer, it is important that you look for a company with expertise and experience, as well as the financial strength to protect you, should a claim arise. Your real estate agent or attorney is a good resource in recommending a company.
When will I know how much money I need for settlement?
As soon as figures are available from the lender, we will be in a position to prepare a final closing statement (“HUD”-1). Typically, this will be a day or two prior to closing. If the final settlement figures are not available in time for you to wire funds to us, go with the good faith estimate provided by your lender. Lakeside Title Company accepts personal checks for the difference of up to $2,000. If the good faith estimate is too high, we will gladly cut a check for the difference.
What type of payment is required for closing?
Wire transfer of funds is required for any monies due over $5,000.00. We cannot accept ACH credits. An actual wire transfer must be sent. We accepted certified, treasurer’s or bank checks up to $5,000, but they MUST be payable to LAKESIDE TITLE COMPANY. Personal checks are accepted for funds due under $2,000.
If there are excess funds presented at closing, we will cut a check back to you for the difference. Please contact one of our processors for wiring instructions.
Who We Serve
More than a title provider, we are your partner.
Lakeside Title Company recognizes the value of providing the tools realtors, lenders, buyers, sellers and builders need to make transactions run smoothly. We pride ourselves on protecting our clients every step of the way and delivering a great experience for you and your client. Lakeside Title Company is more than a title provider, we are a true partner.