Real Estate FAQ’s

Real Estate Closing Portal

When you buy real estate, you want to be sure it’s yours. But even the most diligent search of the public records could fail to disclose a number of title defects. Things such as a forged Deed or Will. Or a title transferred by someone under age. Or a married person conveying real estate without his or her spouse. Or fraudulent impersonations. Secret marriages. Undisclosed heirs. Invalid divorces. False Affidavits. These are just a few of the problems that can suddenly surface. Without the protection of title insurance, you will be in jeopardy of losing your investment.

The stories you are about to read show how such hidden hazards can arise unexpectedly and threaten real estate ownership.

The Case Of The Walking Corpse

The homeowner was a widow with seven sons. One of her offspring, the captain of a fishing vessel, had not been heard from for many years. Presumed lost at sea, he was declared legally dead. When the widow passed away, her six remaining sons inherited her home. It was an attractive house, and they put it on the market at a modest price to facilitate settlement of the estate. Recognizing a bargain, the Montgomery’s bought the property. They were delighted with their new home – until the long lost sea captain returned from the dead.

It turned out the widow’s missing son had decided years ago to start a new life elsewhere. When the captain eventually returned and found the house had been sold, he promptly filed a claim against the Montgomery’s for his rightful share of the property.

The Case Where News Traveled Slowly

A lady of means placed her home in the country up for sale. Before embarking on a cruise, she gave her lawyer power of attorney. Weeks later, the Harper family decided to buy the home. Exercising his authority, the attorney signed the Deed and sold the property to the Harpers.

Everything appeared proper, except for one hitch: The woman dies in a distant port before the attorney signed over the property. When the lady’s heirs discovered that the land had been sold after her death, they claimed the Deed was invalid and demanded their right to the property.

The Case Of The Refined Forger

The Carters were charmed by the elderly lady, Impeccably mannered, she explained that her country home had been vacant for some time, so she was letting it go at an irresistible price. The Carters leaped at the offer, only to find out later they were unwitting victims of a classic forgery caper.

More cunning that an charming, the old woman had learned that the real owners of the country home were living in Europe. She forged a Deed to the property and had it recorded in her own name. Her low asking price assured a quick sale. By the time the Carters were made aware of the scam, the little old lady was long gone – with their investment.

The Case Of John’s Other Wife

John and Maxine were an ideal couple: Pleasant, personable, respected among their peers. They made quite and impression on Mr. and Mrs. Denton who purchased their home.

The Dentons were less impressed, however, when they heard from John’s real wife. It seems that Maxine wasn’t John’s wife, but his mistress, which meant that the Deed she signed was not valid. The Dentons did eventually meet John’s real wife – in court when she claimed her legal right to the property.

HOW TITLE INSURANCE PROTECTS

Property owners are not helpless against these and other pitfalls. You can safeguard your real estate investment against these and other “horrors” with a title insurance policy.

First, a service known as a title search describes the condition and quality of the title to the land you are buying. Then, your title insurance protects you against mistakes or threats that might otherwise result in financial loss to you – including those hidden, unknown items. Your title insurance protection is a permanent assurance that your ownership and use will be defended promptly against claims at no cost to you, whether the claim is valid or not.

Frequently instruments that do not clearly pass title are found in the chain of title or history of ownership assembled from the search of the public records. These need to be corrected before clear title can be conveyed. Some examples of instruments that can present concerns are Deeds, Wills and rusts that contain improper or incorrect names, Outstanding Mortgages, Judgments or Liens, Easements, Incorrect Notary acknowledgments or witnesses to signatures. These problems are normally uncovered through a proper title search and examination, but even the most careful preventive work cannot locate other hidden title hazards – such as forgery – or eliminate the possibility of human error.

WHO DOES TITLE INSURANCE PROTECT?

There are two basic types of title insurance protection – one for mortgage lenders and one for real estate owners. If a mortgage is to be placed on your new property, the mortgage lender will probably require that you purchase title insurance to protect that institution’s position as a holder of a mortgage loan. But this “mortgagee” or “lender” title insurance policy doesn’t protect you, the property “owner.” You need an owner’s title insurance policy to protect your investment. You pay only once. There are no renewal premiums and there is no expiration date on a title insurance policy. Yet the protection lasts as long as you, or your heirs, own the property.

A SMALL COST IF YOU THINK ABOUT IT.

The real estate you own represents stability, permanence and the hope of the future. Don’t take a chance and let your property be taken from you because of a flaw in the title. It makes good sense, for the relatively small amount it costs, to protect yourself with title insurance!

There are two basic kinds of title insurance:

• Owner’s Coverage
• Lender’s (or Mortgage) Coverage

Owners title insurance ordinarily is issued in the amount of the real estate purchase price and lasts as long as the insured owns the property. Owner’s title insurance insures good clear title to the property. Lenders title insurance ordinarily is issued in the amount of the loan. The amount of the lender’s title insurance decreases and eventually disappears as the loan is paid off. Most lenders require mortgagee title insurance as security for their investment in real estate, just as they may call for fire insurance and other types of coverage as investor protection. Lender title insurance insures that there are no other encumbrances superior to the lender’s mortgage lien and that the lender’s mortgage lien is valid.

1. 1. A “mortgage” is a lien on property given as collateral in order to ensure that a loan is repaid. The mortgage is recorded in the Public Records. If the loan is not repaid the lender may “foreclose” the mortgage and sell the property in order to repay the loan.
   2. (1) Title insurance assures a lender that a borrower is the actual and sole owner of a property and (2) that there are no liens or encumbrances affecting the property which would impact the mortgage.
   3. This is important because (1) only the actual and sole property owner can validly create a mortgage lien against his or her property and (2) if there are other liens or encumbrances affecting the property, they may be foreclosed or otherwise affect the lenders ability to foreclose its mortgage lien in the event of a default in repayment of the loan. It would not be prudent for any lender to make a mortgage loan without the assurances of title insurance.
   4. Each time a new mortgage loan is made (i.e. when an owner “refinances”), a new title search (name search, tax search and title search) must be conducted to determine what matters have affected the title to the property since the last search was done. Some examples of such matters might be the death of one of the property owners, the filing of a County-wide Resolution or the filing of a judgment or tax lien against one of the owners. Photocopies of all recorded documents will be reviewed by a trained attorney. A checklist containing everything that must be done in order to insure title with record to that specific property will be prepared. This is commonly referred to as the “title examination.” Fees, associated with the costs and professional time involved in the title search and title examination are paid by the borrower and are tax-deductible. Once all requirements have been met, the title company will issue the lender a title insurance policy. A typical purchase or refinance requires eight to ten hours of professional time plus certain out-of-pocket expenses. If the transaction does not close, the title company will normally absorb the costs for professional time and overhead. The borrower will be asked to reimburse out-of-pocket expenses. Each time a new title insurance policy is issued, a title insurance premium must be paid since the title insurance underwriter will, at its own expense, defend all losses within the coverage of the new policy if they occur. The title insurance premium is tax-deductible. Unlike other types of insurance which require an annual premium, the title insurance premium is paid only at the time of purchase or refinance.

Mortgage Debt Relief

IF:

• You cannot pay your mortgage(s) any longer without eventually spending a substantial part of your retirement account(s) or other savings, and going broke in the future appears to be a real possibility based on current economic realities;
• You wish to avoid bankruptcy;
• Assuming this office is able to get your mortgage debt eliminated, you ARE able to pay your remaining monthly bills and debts from your current income without having to deplete your savings.

THEN:

This Office may be able to help you! However, to determine the options available to you please remit the below-requested information and retainer so that we can get started negotiating with your lender(s).

• Financial Statement of all assets and liabilities, along with note as to how each asset is owned (individually or jointly with spouse, or otherwise)
• Typical Monthly Statement of Income and Expenses (personal monthly budget)
• Copy of most recent federal income tax return.
• Copy of loan closing documents for the mortgage in dispute, including the Note, Mortgage, and HUD Settlement Statement
• Estimated Fair Market Value of the property in dispute based on opinion of local realtor.
• Statement indicating the present unpaid balance of the mortgage(s) in dispute
• If available Realtor’s Comparative Market Analysis, or list provided by Realtor showing all current listings of similar properties and recent closed sales of similar properties
• Statement indicating how long property has been listed for sale;
• Copy of Listing Agreement if available
• Statement of why/how the mortgage(s) in dispute is a financial hardship
• Copy of Short Sale Contract, if one already exists, and copy of Buyer’s pre-approval letter
• Retainer check (contact us for amount).

Upon receipt of the above items, we will review same and perform some preliminary analysis. During the review process we may ask for additional information and/or suggest certain modifications in respect to your financial situation. When we have sufficient information we will call to schedule a personal office consultation or a telephone conference to discuss options and/or strategies.