Tag Archive for: title insurance

Title Insurance Listed as “Optional”

title Insurance folderThe new closing disclosure in October refers to the Owner’s Title Insurance as optional.  It will be important to be prepared to answer any questions that your customer may have and how the insurance protects them and their investment.  In addition, if the Buyer elects to “opt out” of the coverage will you be responsible should something arise down the road for having not advised them?  If the consumer declines coverage after seeing the closing disclosure, the rate structure may change and pose an issue of re-disclosure resulting in potential closing delays.

At Access Title Agency, we have a handout available for you to share with your customers so that they are informed and ready prior to signing the contract.  If they have questions, we are always happy to speak with them on this important issue.

If they elect to decline coverage after reviewing, we will have a disclosure signed by the Buyer that they elected to not afford themselves with this important insurance to protect them and their interest!

Click here for what is title insurance.

Encrypted email is important!

The American Land Title Association best practices recommend that Title Agents adopt and maintain a written privacy and information security program to protect Non-public Personal Information (NPI) as required by local, state and federal laws. Email Encryption is highly recommended because Title professionals are third-party vendors to Lenders and the requirements placed on Lenders by Gramm-Leach-Bliley and similar laws flow through to title and settlement providers.Encrypted email

As a Realtor, you should also demand that your title provider have email encryption to protect your Buyers and Sellers. Title Agents and Attorneys obtain social security numbers for payoffs, tax returns, wire instructions for sending proceeds and other sensitive information. You want to ensure that a breach does not occur with a company you recommended! What a great marketing tool for you to promote to your clients…that you have researched and are looking out for their security and protection to the best of your ability!

Our encryption service at Access Title Agency is smooth, without passwords or links to deal with. In fact 90% of our email recipients will not even notice.

Peace of mind for your and your clients!

Same Sex Marriage and Title Insurance

Are you prepared to discuss real estate and vesting on deeds with your clients since Florida is issuing same-sex marriage licenses?

Read on for one Underwriters perspective.

Old Republic continues to monitor the law regarding same sex marriage, but currently it is still unsettled. Until there is a definitive ruling, our position is as follows:

When both spouses are going into title, you should put their marital status on the deed as instructed. Same sex marriageThey should tell you how they want to take title (i.e., a married couple, married to each other, husband and husband, wife and wife, etc.).

If they do not tell you, you should ask them if they want title vested “as joint tenants with rights of survivorship” or “as tenants in common.” If they do not know, advise them to consult with their attorney to discuss which method adequately meets their estate planning goals for the future. Right now, it is not clear if Florida will be recognizing a tenancy by the entirety (which is automatic when someone takes title as “husband and wife”).

At this point, since we don’t know yet if Florida will be recognizing tenancy by the entireties, judgments against one spouse should be cleared, and a probate will be required if one spouse dies and the grantees did not take title as joint tenants with right of survivorship. If only one spouse is on title, you will need joinder of the other spouse on a mortgage or deed for homestead rights. Commitments should include this in the requirements section if the owner tells you he/she has been legally married in a same-sex ceremony (just like we do now with heterosexual marriages).

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We are here to help if you have any questions.

 

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Title Insurance Policy Surcharge-NEW!

Have you noticed the new fee being collect on closing statements in Florida?
surcharge feesAs of the first of September, the Florida Department of Financial Division has mandated a surcharge be collected for every policy issued in the amount of $3.28. This charge must be shown as a separate entry on the closing statement and payable to the Underwriter.They are trying to protect the consumer from two failed underwriters (National Title Insurance Company and K.E.L. Title Insurance Group, Inc.) and anticipate that it will take approximately one year to recoup the funds extended.

Please note that it is charged only once per closing, meaning that it would not be charged against an Owner’s Policy and a Mortgage Policy for the same file. It is assessed against the party contractually responsible for the payment of the policy.

What is Title Insurance and How Does it Protect Your Clients

We find many buyers and sellers do not know why Title Insurance is needed and what it actually is. Below is a simple definition of the value of Title Insurance.

 Title Insurance

Title InsuranceAn Owner’s Policy of Title Insurance protects the property owner against any claims that may challenge the ownership.  A Lender’s Policy of Title Insurance protects the Lender’s interest in the property should their lien rights be challenged. If unknown defects should come to light, the policy holder is protected against issues that may result in a loss being incurred. This coverage is provided for a one-time fee that is based upon the dollar value of the coverage being provided.

Unlike other forms of insurance, Title Insurance emphasizes RISK PREVENTION rather than RISK ASSUMPTION. To prevent or minimize the risk, a title search is performed by researching the public records available to determine if defects exist on the property. Some of the defects that could be uncovered are access issues, errors in legal descriptions, unreleased mortgages, missing deeds in the chain of title, tax liens, and judgments. The commitment that is produced following this search will identify said risks and determine the steps necessary to correct or remove them prior to or at closing.

After closing, you will receive your Title Insurance Policy which should be kept for future use by you. Should you sell or refinance your property, the policy may be used by us to save you money towards the cost of a new policy. Be sure to contact Access Title Agency for any future transaction to ensure that you will receive credit.

Note: No legal advice or suggestions are being given.
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Open Permits

Agents…….

Are you concerned about open permits?

Building PermitTitle Insurance does not cover permitting issues, however, frequently, when open permits surface post-closing, clients (and agents) turn to the title agent to see why this was not disclosed. The Buyer is mad at their agent and both will be mad at the title agent, so we run a check of properties to see if we can identify any outstanding permit issues. Open permits that are “inherited” by a new Buyer after closing can cost your client thousands of dollars to resolve. The permit issues may not surface from several prior Sellers of the property until a new Buyer goes to obtain a permit for new work to be performed.

A recent example was a property was sold in 2012 and the estoppels and search did not disclose any issue or a code violation. A year after closing, the new Buyer goes to pull a permit for work and is told that they must close out an old one from 2006 against the prior owner. Further, they are told that the open permit was for windows and that they must hire an engineer ($$$$$) to prove that they are in compliance and up to code. Then, a final inspection, and associated fees, must be obtained before they would close it. The Builder who put in the windows was no longer authorized to do work here and was from out of state (another thought as to avoiding this issue!). The Buyer called us and we reviewed that we had all estoppels, including one from the City and the open permit never showed on-line anywhere. We were able to work with the City and eventually, they agreed to send one of their inspectors to the property and closed it out. The end result was good, however, undue stress was caused to the Buyer.

So how can this be avoided?

Unfortunately, this one could NOT have been avoided since the open permit did not appear anywhere but they are ways to minimize the risk.

I think the critical part, is trying to address it early so that it does not delay closing or scare off a Buyer. It also allows for the burden and expense of cleanup by the Seller. Below are some ideas for identifying and avoiding………

• Agents can inquire of the Seller, at the time of the listing, as to any permits or work that was done during their current Seller’s Ownership. This may help to identify a current owner open permit.

• Review of the on-line access sites to identify at the time of a listing.

• Speak with the county or city to inquire on open permits at the time of a listing.

• Encourage property owners to use only quality, licensed, reputable, local contractors.

• Know that there is a stronger likely-hood with property that has been renovated or repairs done.

• Distressed properties also tend to have a higher incidence rate. Maybe the foreclosed home-owner was doing renovations or remodeling work and ran out of money. When the foreclosing bank resells the property, they typically have a disclosure that says the Buyer assumes any and all open permits in addition to other items.

• While open permits are not insured against on an Owner’s Policy, utilize a title agency that will check as a normal course of processing the file, such as Access Title Agency.

 

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Land Title Professionals

Did you know that Land Title Professionals play an important role in our national economy?

The public benefits from our work in the following ways:
Access_Title_Agency_Land_Title_Professionals_2At no cost to taxpayers, the land title industry collects $1.75 Billion per year in back income taxes.
At no cost to taxpayers, the land title industry collects $3 Billion per year in delinquent real estate taxes.
At no cost to taxpayers, the land title industry collects $325 Million in delinquent child support payments.
The land title industry spends $225 Million a year to correct errors in the public property records.

 

Our work brings down the risk of a mortgage loan, which reduces the cost of borrowing for the consumer because investors are more apt to invest in mortgages that are backed by GSEs and title insurance.

The above is an excerpt from an article on the Florida Land Title Association Website.

 

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Broad Exceptions from Coverage

Exceptions from Coverage on Owner’s Policies

Access_Title_Agency_title_policies_exceptionsIt is common for title commitments to contain exceptions from coverage for things that cannot be insured over unless satisfied or removed (ie: liens, restrictions, mortgages, etc.). In addition, there may be exceptions for items that are not of record such as an unrecorded easement that the title insurer would not have knowledge of since it would not be found in the county’s official land records.

Make sure when receiving a title commitment for your client that there are not “broad exceptions” from coverage. Generally speaking, these exceptions exclude any identification for building and use restrictions, easements, and right-of-ways. They usually are a result of a “shorty” search, meaning the title has not been examined back further than the last deed or two in the chain of title to the property. Common use of this practice is higher with foreclosure deals, especially when produced from out of your local area.

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Foreclosures

Access_Title_Agency_Bank_Owned_Foreclosure

Ever have a client not comfortable using the title agency the Seller (Bank) requires on a foreclosure from out of the area?

Make sure your client is given the option of having a title agency that honors its fiduciary responsibility by remaining a neutral third-party to the transaction. Many times, the cost of title insurance can be borne by the Purchaser for minimal dollars on the purchase price on foreclosures.

For example, a Bank-Owned purchase price of $86,000 has a title premium of only $494.50. By letting your client know that they can purchase this title insurance, they will feel more in control of the transaction and appreciate that you gave them another option, and peace of mind.

In addition, you are able to deal with a local title agency that knows your preferences and is down the street from you.

 

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Leasehold Policies

Throughout my 20 plus years in the title industry, and despite having handled many multi-million dollar commercial transactions, I have only seen 20 or so leasehold policies issued.

Access_Title_Agency_Leasehold_PolicyProspective tenants may execute a lease for a term of many years and make significant leasehold improvements to the property without having title to the premises examined or purchasing title insurance.

A title search and the subsequent issuance of a leasehold policy will answer questions, disclose any issues to the title, and afford protection for such things as:

Is the consent of a mortgagee (lender) needed to lease the premises?
Will the tenant’s possession of the premises be at risk due to a foreclosure of a mortgage, liens, non-payment of taxes or other issues?
Is the Landlord named in the lease the correct name or entity name as appears of record?
Are the leased premises subject to any covenants, restrictions, or easements that may limit development or use?

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