Title Insurance–Know the details even after a closing
When you are purchasing a house, many things occupy your time. One thing is that you need title insurance not because you want to spend the money, but the Bank, Lender or Mortgage Company requires it. Since title insurance is required and you’ve hired a lawyer or the title company to do your closing, you let these other professionals handle such things.You concentrate on your work, and you pay others to do theirs. And you assume it is being done correctly.
Below is case in point:
I recently was selling my house, and to my surprise, I found out that my title had a cloud or defect. A defect or cloud is defined as “any irregularity in the chain of title of property (usually real property) that would give a reasonable person pause before accepting a conveyance of title.” My defect/cloud pertained to a 2003 mortgage that was paid off but not recorded correctly or discharged properly and remained outstanding.
As one can imagine this was quite a shock! My home was under contract, and the buyer wanted to close quickly. With the attorney representing me for the potential sale, a firm specializing in defected title retained. More infuriating was that I had refinanced in 2005 and that title company did not correct the issue either
Or made an “exception.” This became extremely frustrating especially since I had paid other “professionals” to do their job and now I could lose the buyer of my home. The closing on my house was delayed, and the deal almost fell thru.
When I found out, I contacted the title company and informed them of their mistakes and the did not care. I had to spend my own money and time to track down the original loan officer, attorney, mortgage company and bank. The mortgage company and the bank were out of business, and the loan officer and attorney were retired. I was able thru research to find out the bank assets were sold to another bank. They informed me the loan was paid in full.
I contacted Mortgage Electronic Registration MERS with this information, and they said they would research into this. The new bank had an email with documentation showing the loan was paid off, I submit that to MERS also. Unfortunately, you need to make sure that the person is handling your title insurance not only on the mortgage but coverage for yourself.
If you are doing a refinance you should see if you can get a title insurance coverage for your self not just covering the mortgage. It is called ALTA lenders title policy with no deletions. I would suggest to everyone when you close on a house or do a refinance. You should run a title search 30 to 60 days afterward to make sure everything was filed correctly. Every few years you should do a title search to make sure there are no liens or errors.
Recently I completed an appraisal assignment, and the lender told me I did not report a recent sale of the subject property per their title company. I told the lender there must be fraud involved, my information was from the tax records showing a previous sale a few years earlier. The conclusion was I was correct, and the title company made the error. I took this issue from the lender serious for me it is USPAP violation, and I could have a problem with the state license board. The title company has no responsibility it is called a scribe error.
The reason I mention this about the title company it is the same one that damaged me personally years ago and was now hurting me professionally.