funds, and record the documents with the county, putting the new buyer into title. Who needs title insurance? Title companies do everything possible to get the most accurate information in our searches, but unfortunately, the information we receive is not always 100% guaranteed. Humans make mistakes, and past records may be inaccurate or recorded incorrectly. There may be unknown errors, fraud, or forgery. These risks are why title insurance exists. Title insurance guarantees the lender and buyer the right to the property unencumbered. Should an issue arise after closing, the title company and insurer have the duty and costs associated with defending those rights. Lenders If a buyer is obtaining a mortgage to purchase their property, all lenders will require a lender’s title insurance policy for the amount of the loan. The lender’s policy is issued to the mortgage lender. The policy protects only the lender from covered losses arising from any defects that become known after the closing. This policy remains in effect until the lender is paid in full, the property is refinanced (in which that new lender would require a new policy), or the property is sold. Owners An owner’s policy is issued to a home buyer. Just like the lender’s policy protects a lender, an owner’s policy protects a buyer from losses that could occur after the closing. Should a buyer not have purchased an owner’s policy, they would have to hire an attorney at their own expense to defend them or solve the issue. What is the process involved in acquiring title services? I will try to make this short and outline a cookie-cutter scenario. Of course, not all transactions necessarily go this way. The average timeline of a transaction is approximately 30 days. As the title company, we usually receive an order request early in that timeline from a lender, a real estate professional, or an attorney. Once we receive a lender order and purchase agreement, we create a new file. Usually, within the first week, we contact the parties, gather the information we need, order abstracting and searches and wait for a commitment to be produced by one of our examiners. Once completed, we send the commitment to insure to all parties, and a closing day and time will be scheduled for everyone involved. Once everything is closed and funded, and after receiving the recorded documents back from the county, we issue the final insurance policies. By whom are these services intended to be used? Typically, our clients are lenders, real estate agents, attorneys, banks, investors, and home builders. Because we have relationships with these professionals, they are usually our first contact. We offer many services for different clients and needs. A couple of examples could include: A real estate agent is getting ready to list a property but feels the homeowner is not telling them the entire truth about the transaction. Something just isn’t adding up, and they do not want to list the property under this suspicion. An agent may come to us and ask us to do a preliminary search on the property. In the 24 LAWYERMONTHLY SEPTEMBER 2022 Most consumers are not familiar with what a title company does, what title insurance is, or how important of a role we play.
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