Wednesday, February 11, 2009

Examination of Title Insurance

Generally, an examination or search is not defined by law or regulation, although some states established the period of time that must be covered by a title plant. The period of examination is commonly based upon local custom and upon specific underwriting guidelines. Local custom may be evidenced by State Bar Standards or the period required for the root of title under a marketable record title act (although these acts contain numerous exceptions).

Title insurer guidelines will vary, depending upon the location or state of the land and upon whether the land is residential or other land. Typically, title companies will rely upon "starters," such as prior title policies issued by other title companies. While title policies may be a basis for examining forward, this will not generally be true of a prior short form loan policy, unless the new policy also is a short form loan policy.

Some title insurers will allow title insurance agents to start their title searches with prior commitments, loan policies and owner's policies issued by other title insurers, while other title insurers more commonly allow title insurance agents to start searches only with prior owner's policies and, in some cases, loan policies.

On residential transactions, some title companies will allow a 1-3 bona fide deed search (going back only one to three deeds in the chain), and name check and tax search, together with review of subdivision exceptions shown on a reference file and on the plat.

Some title companies will allow a search beginning with the most recent outstanding "first" bona fide mortgage or start with the first such mortgage before the most recent deed, subject to a general exception to restrictions or minerals. The practices vary among title companies, but short searches are common on residential transactions.

In some transactions, no additional search is merited if some requirements are made or if the product is narrowly designed.

Factual information set forth as exceptions and other specific provisions of commitments and policies of other title insurers that reflect the matters affecting marketable title do not merit copyright protection.

1 comment:

  1. Obviously some mortgage lenders, especially non-institutional lenders, may not require title insurance. Buyers purchasing properties for cash (without a lender) often want title insurance as well.


Search This Blog