Tuesday, July 10, 2018

Closing Time: 6 Steps Every Homebuyer Should Expect


Get owner’s title insurance and buy your home with confidence

Your long home-buying journey is almost over. You found the home you love, the seller agreed to your offer and now it’s time for closing. Of course, there’s a lot to think about right now, and the last thing you want is something­ to go wrong. So make sure you work with an experienced closing agent to help ensure the details come together and everything runs smoothly.

As soon as the seller accepts your offer, the behind-the-scenes work begins. You can expect closing to happen within 30 to 90 days.

1.    Select a Closing Agent

If you are working with a real estate agent, with your permission, he or she may place an order with a closing agent as soon as your sales contract is accepted. The closing agent can be a title company, an escrow company or a settlement company.

Most homebuyers rely on their real estate agent to select a closing agent—someone they work with regularly and know to be professional, reliable and efficient. However, you can choose your own closing agent if you wish. The closing agent will oversee the closing process and make sure everything happens in the right order and on time, without unnecessary delays or glitches.

2.    Draw up an Escrow Agreement

First, a contract or escrow agreement is drafted, which the closing agent reviews for completeness and accuracy. The agent will also put your deposit into an escrow account, where the funds will remain until closing.

3.    Title Search is Conducted

Once the title order is placed, the title company conducts a search of the public records. This should identify any issues with the title such as liens against the property, utility easements, and so on.  If a problem is discovered, most often the title professional will take care of it without you even knowing about it. After the title search is complete, the title company can provide a title insurance policy.



4.    Shop for Title Insurance

There are two kinds of title insurance coverage: a Lender’s policy, which covers the lender for the amount of the mortgage loan; and an Owner’s policy, which covers the homebuyer for the amount of the purchase price. If you are obtaining a loan, the bank or lender will typically require that you purchase a Lender’s policy. However, it only protects the lender.

It is always recommended that you obtain an Owner’s policy to protect your investment. The party that pays for the Owner’s policy varies from state to state, so ask your settlement agent for guidance before closing.

5.    Obtain a Closing Disclosure

Your lender must provide a Closing Disclosure to you at least three days prior to closing. Your lender may also have a closing agent provide the Closing Disclosure to you three days before you close your transaction.

If you or your lender makes certain significant changes between the time the Closing Disclosure form is given to you and the closing, you must be provided a new form and an additional three-business-day waiting period after receipt of the new form. This applies if the creditor:
·        Makes changes to the APR above ⅛ of a percent for most loans (and ¼ of a percent for loans with irregular payments or periods)
·        Changes the loan product
·        Adds a prepayment penalty to the loan

If the changes are less significant, they can be disclosed on a revised Closing Disclosure form provided to you at or before closing, without delaying the closing.

6.    The Finish Line: Prepare for Closing

As closing day approaches, the closing agent orders any updated information that may be required. Once the closing agent confirms with the lender and the seller, he or she will set a final date, time and location of the closing.
On closing day, all of the behind-the-scenes work is complete. While you’ve been busy packing, ordering utilities and coordinating the movers, your closing agent has been managing the closing process so that you can rest assured, knowing all the paperwork is in order.



More Homebuyer Tips & Information

The American Land Title Association helps educate homebuyers like you about title insurance so you can protect your property rights. Check out www.homeclosing101.org to learn more about title insurance and the home closing process.


This advertising offers a brief description of insurance coverages, products and services and is meant for informational purposes only. Actual coverages may vary by state, company or locality. You may not be eligible for all of the insurance products, coverages or services described in this advertising. For exact terms, conditions, exclusions, and limitations, please contact a title insurance company authorized to do business in your location.

Tuesday, June 19, 2018

7 Reasons Why Every Homebuyer Needs Owner’s Title Insurance


Buying a home is an exciting and emotional time for many people. To help you buy your home with more confidence, make sure you get owner’s title insurance. Here’s why it’s so important for you.

 

1.    Protects Your Largest Investment

A home is probably the single largest investment you’ll make in your life. You insure everything else that’s valuable to you—your life, car, personal property, health, pets, jewelry, etc.—so why not your largest investment? For a one-time fee, owner’s title insurance protects your property rights for as long as you or your heirs* own the home.

2.    Reduces Your Risk

If you’re buying a home, there are many hidden issues that may pop up after purchasing it. Getting an owner’s title insurance policy protects you from legal title discrepancies. Don’t think it will happen to you? Think again. Here are just some of the many situations that you’ll be protected from if you have owner’s title insurance.

Unforeseeable title claims, such as:
·        Forgery: making a false document
       For example, the seller misrepresents the identity of the person selling the property.
·        Fraud: deception to achieve unfair gain
       For example, someone steals your identity and either sells your house without your knowledge or consent, or takes out a second mortgage on the property and walks away with the money.
·        Clerical error: inconsistent paperwork and historical records
       For example, an unforeseeable discrepancy in the property or fence line causes confusion in ownership rights.

Unexpected title claims, such as:
·        Outstanding mortgages and judgments, or liens against the property because the seller didn’t pay required taxes
·        Pending legal action against the property that could affect your ownership
·        An unknown heir of a previous owner who is claiming ownership of the property

3.    You Can’t Beat the Value

Owner’s title insurance is a one-time fee that’s very low relative to the value it provides. It typically costs around 0.5% of a home’s purchase price.

4.    Covers Your Heirs*

As long as you or your heirs* own your home, owner’s title insurance protects your property rights.

5.    Nothing Compares

Home insurance and warranties protect only the inside of the home. Getting owner’s title insurance ensures your family’s property rights stay protected.

6.    8 in 10 Homebuyers Agree

Each year, more than 80% of America’s homebuyers choose to get owner’s title insurance.

7.    Peace of Mind

If you’re buying a home, owner’s title insurance lets you rest assured, with the knowledge that you won’t be stuck with certain existing debts or legal problems once you’ve closed on your new home.

More Homebuyer Tips & Information

The American Land Title Association helps educate homebuyers like you about title insurance so you can protect your property rights. Check out www.homeclosing101.org to learn more about title insurance and the home closing process.

*This advertising offers a brief description of insurance coverages, products and services and is meant for informational purposes only. Actual coverages may vary by state, company or locality. You may not be eligible for all of the insurance products, coverages or services described in this advertising. For exact terms, conditions, exclusions, and limitations, please contact a title insurance company authorized to do business in your location.


Monday, April 23, 2018

YOUR TITLE INSURANCE POLICY PROTECTS YOU AGAINST POTENTIAL DEFECTS SUCH AS:

1. Forged deeds, mortgages, satisfactions, or releases
2. Deed by person who is insane or mentally incompetent
3. Deed by minor (may be disavowed)
4. Deed from corporation, unauthorized under corporate bylaws
or given under falsified corporate resolution
5. Deed from partnership, unauthorized under
partnership agreement
6. Deed from purported trustee, unauthorized
under trust agreement
7. Deed to or from a “corporation” before incorporation,
or after loss of corporate charter
8. Deed from a legal nonentity (styled, for example, as a
church, charity, or club)
9. Deed by person in a foreign country, vulnerable to challenge
as incompetent, unauthorized, or defective under foreign laws
10. Claims resulting from use of “alias” or fictitious namestyle
by a predecessor in title
11. Deed challenged as being given under fraud, undue
influence, or duress
12. Deed following nonjudicial foreclosure, where required
procedure was not followed
13. Deed affecting land in judicial proceedings (bankruptcy,
receivership, probate, conservatorship, dissolution of
marriage) unauthorized by court
14. Deed following judicial proceedings subject to appeal or
further court order
15. Deed following judicial proceedings where all necessary
parties were not joined
16. Lack of jurisdiction over persons or property in
judicial proceedings
17. Deed signed by mistake (grantor did not know what
was signed)
18. Deed executed under falsified power of attorney
19. Deed executed under expired power of attorney
(death, disability, or insanity of principal)
20. Deed apparently valid, but actually delivered after death
of grantor or grantee, or without consent of grantor
21. Deed affecting property purported to be separate property
of grantor, which is in fact community or jointly owned
property
22. Undisclosed divorce of one who conveys as sole heir of
a deceased former spouse
55. Erroneous or inadequate legal descriptions
56. Deed to land without a right of access to a
public street or road
57. Deed to land with legal access subject to undisclosed
but recorded conditions or restrictions
58. Right of access wiped out by foreclosure on
neighboring land
59. Patent defects in recorded instruments (for example, failure
to attach notarial acknowledgment or a legal description)
60. Defective acknowledgment due to lack of authority of
notary (acknowledgment taken before commission or
after expiration of commission)
61. Forged notarization or witness acknowledgment
62. Deed not properly recorded (wrong county, missing pages
or other contents, or without required payment)
63. Deed from grantor who is claimed to have acquired title
through fraud upon creditors of a prior owner
And extended coverage may be requested to
protect against such additional defects as:
64. Deed to a purchaser from one who has previously sold
or leased the same land to a third party under an
unrecorded contract, where the third party is in
possession of the premises
65. Claimed prescriptive rights, not of record and not
disclosed by survey
66. Physical location of easement (underground pipe or sewer
line) which does not conform with easement of record
67. Deed to land with improvements encroaching upon
land of another
68. Incorrect survey (misstating location, dimensions,
area easements, or improvements upon land)
69. “Mechanics’ lien” claims (securing payment of contractors
and material suppliers for improvements) which may attach
without recorded notice
70. Federal estate or state inheritance tax liens (may attach
without recorded notice)
71. Preexisting violation of subdivision mapping laws
72. Preexisting violation of zoning ordinances
73. Preexisting violation of conditions, covenants, and
restrictions affecting the land
23. Deed affecting property of deceased person,
not joining all heirs
24. Deed following administration of estate of missing person
who later reappears
25. Conveyance by heir or survivor of a joint estate who
murdered the decedent
26. Conveyances and proceedings affecting the rights
of service member protected by the Soldiers and
Sailors Civil Relief Act
27. Conveyance void as in violation of public policy (payment of
gambling debt, payment for contract to commit crime, or
conveyance made in restraint of trade)
28. Deed to land including “wetlands” subject to public trust
(vesting title in government to protect public interest in
navigation, commerce, fishing, and recreation)
29. Deed from government entity, vulnerable to challenge as
unauthorized or unlawful
30. Ineffective release of prior satisfied mortgage due to
acquisition of note by bona-fide purchaser (without notice of
satisfaction)
31. Ineffective release of prior satisfied mortgage due to
bankruptcy of creditor prior to recording of release
(avoiding powers in bankruptcy)
32. Ineffective release of prior mortgage or lien, as fraudulently
obtained by predecessor in title
33. Disputed release of prior mortgage or lien, as given under
mistake or misunderstanding
34. Ineffective subordination agreement causing junior interest
to be reinstated to priority
35. Deed recorded but not properly indexed so as to be
locatable in the land records
36. Undisclosed but recorded federal or state tax lien
37. Undisclosed but recorded judgment or spousal/child
support lien
38. Undisclosed but recorded prior mortgage
39. Undisclosed but recorded notice of pending lawsuit
affecting land
40. Undisclosed but recorded environmental lien
41. Undisclosed but recorded option, or right of first refusal,
to purchase property
42. Undisclosed but recorded covenants or restrictions,
with (or without) rights of reverter
43. Undisclosed but recorded easements (for access, utilities,
drainage, airspace, views) benefiting neighboring land
44. Undisclosed but recorded boundary, party wall,
or setback agreements
45. Errors in tax record (mailing tax bill to wrong party resulting
in tax sale, or crediting payment to wrong property)
46. Erroneous release of tax or assessment liens, which are
later reinstated to the tax rolls
47. Erroneous reports furnished by tax officials (not binding
local government)
48. Special assessments which become liens upon passage
of a law or ordinance, but before recorded notice or
commencement of improvements of which assessment
is made
49. Adverse claim of vendor’s lien
50. Adverse claim of equitable lien
51. Ambiguous covenants or restrictions in ancient documents
52. Misinterpretation of wills, deeds, and other instruments
53. Discovery of will of supposed intestate individual,
after probate
54. Discovery of later will after probate of first will

First American Title Insurance Company makes no express or implied warranty respecting
the information presented and assumes no responsibility for errors or omissions. First
American, the eagle logo, First American Title, and firstam.com are registered trademarks
or trademarks of First American Financial Corporation and/or its affiliates.
AMD: 04/2018

Thursday, March 29, 2018

Why 20% of Homebuyers May Not Sleep Tonight


Each year, approximately 20% of homebuyers fail to protect themselves by not getting owner’s title insurance. Unfortunately, this leaves them exposed to serious financial risk—causing endless worry and regret.

If you’re thinking of buying a home, here’s what you need to know to protect yourself and your property rights, so you can rest assured once you’ve purchased your home.

Looking For Potential Threats

During the home-closing process, your title professional will help transition the home from the seller to you, the homebuyer, by examining public records. Generally, if a problem is discovered, the title professional works to resolve them before you purchase the home. 

However, even after a title search is performed and you purchase your home, problems could arise that threaten your ownership rights. Examples include:

·        Undiscovered tax liens
·        Forged signatures in the chain of title
·        Recording errors
·        Undisclosed easements
·        Title claims by missing heirs* or ex-spouses

Getting owner’s title insurance protects your property rights from threats like these. Here’s a real-life example of how it works.

True Story

A family in Missouri unknowingly purchased their home from a seller who had taken out a separate $419,000 loan on the property. But this fact was not discovered during the closing process, and the family’s lender paid the seller directly instead of paying off the existing loan.

Soon, the family faced foreclosure because someone else had claim against their title. Fortunately, the family had owner’s title insurance. So the title company paid the debt and the family kept their home—and peace of mind. 

This story has a positive ending, but without owner’s title insurance, the family could have faced serious costs, and even eviction.

Protect Yourself

There are two types of title insurance: lender’s title insurance and owner’s title insurance.

Lender’s title insurance is required by most lenders and banks because it protects their loan investments. Usually, you purchase this policy as the homebuyer. If you only have a lender’s policy, where the outstanding loan is covered, your equity is not protected. Therefore, you could have your property rights taken away if someone else has claim to your home.  

Owner’s title insurance is the policy that protects your property rights from legal and financial threats like those mentioned in the story you just read. That’s why millions of homebuyers each year make the smart decision to get owner’s title insurance. It’s a low, one-time fee that provides the peace of mind that every homebuyer deserves, for as long as you or your family* own your home. In many areas, the seller purchases the policy for you. Ask your title professional how it’s handled in your area.

Support and Free Information

To buy your home with confidence, you need to work with a trusted title professional. They’re the experts who will help you throughout the home closing process. They will also advise you on how to protect your property rights and avoid costly problems by getting owner’s title insurance.

For more information, ask an ALTA member or visit www.homeclosing101.org.


*This advertising offers a brief description of insurance coverages, products and services and is meant for informational purposes only. Actual coverages may vary by state, company or locality. You may not be eligible for all of the insurance products, coverages or services described in this advertising. For exact terms, conditions, exclusions, and limitations, please contact a title insurance company authorized to do business in your location.

Friday, February 23, 2018

What Every Realtor® Should Know About Owner’s Title Insurance


Make sure all of your clients are protected

You’re a real estate agent, so you know that buying a home can be overwhelming for many of your clients. Homebuyers can easily feel confused and frustrated by the mounds of paperwork they have to sign. Plus, all the fees associated with closing can sometimes be a surprise even to an experienced buyer.

Owner’s title insurance is one of those items often misunderstood by homebuyers at closing, yet its value is tremendous. As an important advisor to your clients, you are in the position to help them understand the value of owner’s title insurance and the dangers that can be incurred without it. 

What is title insurance?

Owner’s title insurance is a policy that protects homebuyers’ property rights. For the same reasons that the bank requires a lender’s insurance policy, a homebuyer obtains owner’s title insurance to protect their legal claims to the property. 

How it protects your clients

Say, for example, your client recently purchased a new home from a builder, but the builder failed to pay the roofer. Wanting to be paid, the roofer filed a lien against the property. Without owner’s title insurance, your client would be responsible for paying this existing debt—meaning they’d be paying the roofer out of pocket instead of purchasing something nice for their new home, like new living room furniture. This is just one example of how owner’s title insurance protects homebuyers’ from various significant risks. With owner’s title insurance, your client would be protected from certain legal or financial responsibilities.

Enduring value

The good news is that owner’s title insurance protects homebuyers financially, as long as they or their heirs* own the home. For a low, one-time fee (average of 0.5% of purchase price), homebuyers can rest assured, knowing they are protected from inheriting existing debts or claims to their property.

State regulations and CFPB

Each state government regulates its own title insurance costs. In addition, the Consumer Financial Protection Bureau (CFPB) regulates closing and settlement practices which can impact title insurance. Keep in mind that title insurance industry practices vary due to differences in state laws and local real estate customs. The party that pays for the owner’s title insurance policy varies from state to state, and sometimes even within a state. For more information about title insurance, or to find a company approved to issue an owner’s policy, please direct your homebuyer clients to www.homeclosing101.org.

Free resources for Realtors®

Together, real estate agents, land title insurance professionals and other stakeholders involved in real estate transactions can protect homebuyers and provide them with the peace of mind they deserve during the home closing process.

For more information about title insurance, and to get free resources for real estate agents, visit www.alta.org/realtor.

*This advertising offers a brief description of insurance coverages, products and services and is meant for informational purposes only. Actual coverages may vary by state, company or locality. You may not be eligible for all of the insurance products, coverages or services described in this advertising. For exact terms, conditions, exclusions, and limitations, please contact a title insurance company authorized to do business in your location.