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Consumer Services

Consumer FAQ's

What is title insurance?

Title insurance is an insurance policy that protects the insured against loss of his/her interest in the property due to legal defects in title, which problems were present prior to you taking title to the property.

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Why is title insurance important?

The purchase of a home or other real estate is generally a significant investment. Having title insurance can save you money, time, trouble, and even your home, if a problem arises in your title.

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What types of coverage are offered?

There are two types of coverage offered. The first is a Lender’s Title Policy – this type of policy protects the Lender involved in the transaction (the Mortgage Company) to the extent of its loan. It does not protect the homeowners’ interest. This policy is generally a condition of your mortgage. The second type of coverage is the Owner’s Title Policy. This policy is optional, and it offers the homeowners protection against loss of their interest in the property due to a title problem arising, subject to the terms of the policy.

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What is a title search?

A title search is a review of the land, court and municipal records pertaining to the property. In conducting a title search, the settlement agent/attorney will confirm that you are purchasing the property from the legal owner, that after settlement all prior liens will be satisfied, that the property will pass free of legal attachments, that the title to the property will be marketable, and that there are no burdens or restrictions affecting the property.

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If a title search is conducted, why is title insurance still important?

Although a title search is conducted, the search could still fail to detect some problems that may affect your interest in the property. Some examples of these types of problems are: 1) incorrect information in the public records, 2) unsatisfied liens against the property, 3) claims to ownership from an undisclosed interest (i.e.: missing heirs, marital interests, 4) invalid deeds and/or transfers, 5) fraud or forgeries.

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What is a ground rent?

The typical ground rent situation is a 99-year lease, renewable forever, which subjects the owner of the house to pay a "rent" for the land. So long as the ground rent is current, the owner of the land cannot remove the owner of the improvements from the property. The ground rent is identified by an annual payment, which is usually payable in semi-annual installments. Generally, ground rents are redeemable, however those that were created prior to 1884 may not be redeemable.  It will be necessary to verify the owner and current payment status of a ground rent in conducting the closing.  Please provide this information to the closing agent as soon as possible to avoid unnecessary delays.

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What is a HUD-1?

A Hud-1 is the form used for the settlement statement. This form identifies and discloses all of the charges applicable due to the transfer or refinance of the property. It also allows for adjustments or proration of expenses paid for the property over time, for example – water bills, tax bills, homeowner association fees, condominium fees and other assessments. All closing costs are represented on this statement to identify the bottom line paid for the property by the buyer and the bottom line received by the seller.

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What does title insurance cost?

Title Insurance premiums vary from state to state, but are set within the jurisdictions with the Insurance commissions or agencies. It is a one-time premium and the coverage afforded by the policies last for the duration of your ownership in the property or the existence of the loan depending on the type of policy issued.

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What is the difference between Title Insurance and other types of Insurance?

The main difference between title insurance and other insurance policies is that title insurance protects the insured party against defects in title that may arise as a result of prior ownership. Other insurance policies protect the insured from loss as a result of future actions and not against prior acts or omissions.

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What happens at closing?

Closing or settlement is the point in time when ownership is transferred or the owner refinances the property. Various people could be present at closing – these may include the closing agent, the buyer, the seller, real estate professionals involved in the transaction, and bank agents. At closing, all documents necessary to transfer and insure the property will be explained and executed by the necessary parties. Additionally, if a lender is involved, all documents necessary to create the new mortgage against the property will be review and executed. All title costs and settlement costs will be collected in addition to the consideration in the transaction. All funds involved in the closing will be placed in an "escrow account" to assure their proper handling and disbursement. This is your opportunity to ask all the questions you have developed during the contract period. When you leave the closing, the property will have transferred and/or have had financing put in place, creating a lien against the property.

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