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FREQUENTLY ASKED
QUESTIONS
Q: What is title insurance?
A: Title insurance is an insurance policy or
contract which provides protection against loss
should the condition of title to land be other than
as reflected on the title policy.
Q: Who pays for title insurance?
A:
In almost all purchase transactions, the seller is
responsible for payment for title insurance.
In loan transactions, the borrower would be
responsible for payment for title insurance.
In each case, those charges are paid at the time of
closing.
Q: What is a title search?
A:
A title searcher reviews the records in the
Recorder's Office to confirm ownership of the
property and to identify any liens or other matters
which affect the property. Based on the
findings in the search, a Commitment for Title
Insurance can be issued.
Q: Why is title insurance needed?
A: When you buy a home, or other property, you
expect to enjoy certain benefits from ownership. For
example, you expect to be able to occupy and use the
property as you wish, to be free from debts or
obligations not created or agreed to by you, and to
be able to freely sell or pledge your property as
security for a loan. Title insurance is designed to
insure these rights for which you bargained.
Q: What are some of the matters against which
title insurance protects?
A: False impersonation of the true owner of the
property, forged deeds, releases or wills,
undisclosed or missing heirs, instruments executed
by minors, persons of unsound mind or under an
invalid or expired power of attorney, mistakes in
recording legal documents, misinterpretations of
wills, liens for unpaid estate, inheritance, income
or gift taxes, fraud, failure of a spouse to join in
conveyances when necessary and false affidavits.
Q: Why is a loan policy needed for a refinance of
a mortgage loan?
A: Even if a loan policy were issued when you
originally financed your property that will not
insure the new mortgage given when you refinance,
and it doesn’t provide protection against events
that may have transpired between the time you
purchased the property and when it is refinanced. A
separate policy is needed by the lender to insure
the validity of your new mortgage when it is made.
Q: What happens at the closing of a real estate
transaction?
A: On the day of closing, the buyers or their
lender will deposit any remaining money due into
escrow with the title company and will sign all loan
documents. The sellers will sign the deed and
closing statement and, following a final check of
the records, receive a check for the money due to
them. As soon as possible following the closing, and
a subsequent search of the records, the deed and any
mortgage documents are taken to the county court
house and recorded in the official records. These
documents are then made of “public record” for
anyone to see.
Q: What is homestead property?
A: Property in which an individual has an
ownership interest or rightly possesses the property
by lease or otherwise, and occupies the property as
his or her primary residence.
Q: What is a lien waiver?
A: A lien waiver is a receipt showing that a
specified amount has been paid for work done on the
property by a vendor, and that the vendor has no
lien rights against the property.
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