What does a Title Company do?
company oversees the interests of all parties - buyers, sellers, lenders and
REALTORS®- and coordinates the transfer of money and property at the time of
closing. Prior to settlement the title company researches the ownership history
of the property (title examination) to determine that the title is free of any
liens or claims. At the closing table, the title company collects and
distributes funds from the transaction, transfers ownership of the property, and
issues title insurance.|
The title company opens the file by contacting
the city or county offices where the property is located. They conduct a full
property search in the local record to learn everything about the property's
The title company examines the title to verify that all
outstanding liens are satisfied. An investigation of the property survey
determines if the house is built on the correct lot or if there are
encroachments on border properties.
A title commitment is prepared for the lender, which ensures their
protection against a title claim. Owner's title insurance protects you, the
buyer, from any fraud or hidden risk undetectable during the title search.
Next, the HUD-1 Settlement Statement is prepared based on the figures
provided by the lender and other entities. After the loan and settlement papers
are signed, the title insurance company disburses the mortgage package, making
sure everyone from the seller to the termite inspector is paid. The package is
returned to the mortgage company and the deed and the new mortgage are recorded.
Finally, the title company records the release of the seller's
Title Insurance and why do I need it?
protects you as the property owner and the lending institution that holds your
mortgage from unforeseen claims that may arise against your property. The policy
provides protection from financial loss and payment of legal costs associated
with such claims.
Some of the risks protected under a title policy include: forged
documents, clerical errors in public records, fraud, unpaid taxes, signature of
minors, deeds from mentally incompetent persons, and undisclosed or missing
heirs or previous owners of the property.