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FAQ

What does a title company do?

A title company not only works for you on your transaction from conception to close, but works beyond the closing to make sure that you are protected and on record.

One of the most important aspects of the title company’s responsibilities is to guarantee clear and marketable title to your property.  How do we do this?  We accomplish this by first examining the land records in the county court house in which the property is located.  We also investigate all current owners of the property.  We start our investigation with the current owner and current date and we search back 60 years.

 

What is the title company looking for?

We are looking for all liens on the property.  Which could be, but will not be limited to, any mortgages, delinquent taxes, water bills or any other delinquent utilities, homeowners or condominium association dues, mechanic liens and/or any current or pending judgments that could attach to the property as a lien.

 

Where does the title company look for all of these potential problems?

We must examine the county land records where the property is located, the court records for any recorded or pending judgments, order and review tax certificates or lien certificates, review the tax records, obtain payoffs for any current mortgages or liens, track down any unreleased mortgages, and obtain information from any appropriate association or other company claiming any financial or other interest in the property.

 

What happens if the title company finds a problem?

If we find issues with your title we will take appropriate steps, if possible, to fix the issues so that you, the seller, will be able to offer clear and marketable title to the buyer and continue on to settlement.

 

This sounds like a lot of intricate detail, do I have any guarantee that it’s correct?

You sure do!  Once we clear title we offer you and your lender an insurance policy, which is called title insurance.  Any institutional lender is going to require that they are covered under a separate policy 100% of the time.

 

What is title insurance?

Unlike other types of insurance that offer protections against future occurrences, title insurance offers protection against past occurrences which could result in a claim at a future date. Title insurance is a protection, available to purchasers and lenders of real estate, which places the underwriter in the position of defending, at its cost and its risk, up to the policy amount, any special claims against the property not excepted by the policy. The title insurance policy protects the insured against loss should the condition of the title to the land be other than as issued. Coverage continues in effect for as long as you have an interest in the covered property.

 

Do I get my own policy or am I covered under the lender’s policy?

There are two types of the title insurance. One type of policy covers the lender. The other policy covers the owner or purchaser of the property. The lender’s policy is a separate policy which protects the lender’s interest in the property, up to the outstanding balance of their mortgage.  Lenders require the buyer(s) purchase a title insurance policy on behalf of the lender. The lender policy protects the lender against loss due to unknown title defects. This policy protects only the lender’s interest; it does not protect the buyer. The owner’s policy protects against loss due to any of the problems mentioned above. Even a hidden hazard can result in a claim against your ownership. Owner’s coverage provides for legal defense and any liability or loss that may arise.

 

Can I get more coverage that the standard owner’s policy offers?

Absolutely! 

Meridian settlement offers our residential customers two levels of coverage for your protection. The standard policy covers you for defects and liens in the history of your title to the date and time your deed is recorded in public records.  The ALTA homeowner’s policy provides enhanced coverage, protecting you from additional risks, including some that might occur after the deed is recorded.

 

These risks are covered in the standard owners policy.

Third-party claims an interest in the title.

Prior, forgery, fraud, or duress  affecting the title.

Liens or encumbrances on the title (e.g., prior mortgage or deed of trust, state or federal tax lien, condominium or Homeowners Association lien.)

Improperly executed documents.

Defective recording of documents.

Unmarketability of the title.

Lack of a right of legal access to and from the land.

Restrictive covenants limiting your use of the land.

Gap Coverage (extending coverage from the closing to the recording of the deed)

 

Duration

Coverage continues as long as you own the property.

Policy insures anyone who inherits the property from you.

Policy insures the trustee of an estate planning trust

policy insures the beneficiaries of a trust upon your death.

 

These risks are covered in the ALTA Enhanced owner’s policy.

Parties in possession of the property that are not disclosed by the public records (for example, tenants, adverse possessor’s)

Unrecorded easements (for example, prescriptive easements) affecting the property.

Encroachments and boundary lines disputes that would be disclosed by a survey.

Mechanics liens (a lien against the property due to nonpayment of work by a contractor)

Taxes or special assessments that are not shown as liens by the public record.

Actual vehicle or and pedestrian access, based upon a legal right.

You must correct or remove an existing violation of certain covenants, conditions, or restrictions.

Loss of your title resulting from a prior violation of covenants, conditions, or restrictions.

Up to $10,000 if you are unable to obtain a building permit due to an existing violation of a subdivision law or regulation, or you must correct an existing violation. (subject to a deductible)

Up to $25,000 if you must remedy or remove an existing structure because it was built without a proper building permit (subject to a deductible)

Up to $25,000 if you must remedy or remove an existing structure due to an existing violation of the zoning law or zoning regulation (subject to a deductible)

Up to $5,000 if you must remove your existing structures because they encroach onto your neighbor’s land (subject to a deductible)

You cannot use the land as a single-family residence because such use violates an existing zoning law or zoning regulation.

You are forced to remove your existing structures because they encroach into an easement or over a setback line.

Damage to existing structures due to an exercise of an existing right to use any easement affecting the land.

Damage to the existing improvements due to an exercise of an existing right to use the surface of the land for the extraction or development of minerals, water, or any other substance.

Attempted enforcement of discriminatory covenant.

Supplemental taxes because of prior construction or change of ownership or use.

Damages if the residence is not located at the address stated in the policy.

Pays substitute rent  and relocation expenses, if you cannot use your home because of a claim covered by the policy.

Automatic increases in policy amount up to 150% of policy amount over five years.

 

Post policy coverages.

Forgery affecting the title.

Unauthorized leases, contracts, or options.

Ownership claims.

Easements or restrictions affecting your use of the land.

Encroachment of neighbor’s buildings onto your land.

Disclaimer – both policies contain certain stipulations and conditions as set out by Stewart Title Guaranty Company and the American Land Title Association. If you have questions regarding your legal rights under the various policies, we suggest that you contact your attorney.

 

This sounds like it is going to cost me a fortune!  How much is owner’s title insurance?

You are going to be shocked to find out that all of this coverage is going to be less than 1% of the contracted sales price.  The best news yet is that you don’t have to pay for this coverage ahead of time.  The one time premium for title insurance is collected right on the settlement statement and is included in your loan.

 

Why do I need title insurance if my lender is getting it?

The lender’s policy does not protect you, it only protects the lender.

 

What if I don’t want title insurance, what’s the worst that could happen to me?

You could lose your entire home and property and still be liable to pay off the balance of your mortgage. Most claims are not that drastic, but even the smallest, or fraudulent claim can cost you thousands of dollars to defend and hours of aggravation.

Think about it this way.  Your lender, with billions of dollars in assets, is going to require a policy to cover them.  Don’t you think it’s a smart choice for you to have coverage too?

 

We have clear and marketable title, what happens next?

While we have been working on your title work, your lender has been busy underwriting your loan and preparing a clear to close (CTC).  Once the CTC is prepared your lender will forward to us their instructions on how to prepare your settlement statement and how to conduct the settlement.  In the preparation of the settlement statement we include all of the allocated costs associated with this transaction and compare that to your loan amount which gives us either funds that we need to give to you or funds that we need to collect from you at settlement.

 

What if the title company owes me money, how do I get it from them?

We will have a check prepared for you at settlement.

 

Can I have my money wired directly to my bank account?

Yes.  However, we are going to need very specific wiring instructions from your bank to accomplish this.

(Link to wire form)

Also keep in mind that we will charge you $35 for this service and your bank may also charge you for the incoming wire.  We have seen charges up to $50.  Use this service wisely, as it may not be a good decision to wire $100 if it’s going to cost you $85.

 

What if I owe money to the title company?

Stewart, our title insurance underwriter requires the funds be wired to us, if possible.  If a bank wire transfer is impossible, we will accept certified funds drawn on a local or nationally known bank.  These funds must be deposited into our account the day prior to closing so that they can be credited to our account in time for closing. See the list of documents for wiring instructions

 

What can I expect at settlement?

Meridian Settlement will provide for you, a knowledge, State licensed, settlement officer that will go over in detail all of the specific aspects of your transaction.  They will go over each and every page of the loan package making sure that you have complete understanding of the loan that you are entering into.  They will confirm that you know the amount that you are borrowing, the term of the loan, the interest rate, if that rate can change, the costs associated with your loan and the amount you will have to pay every month.  This list is an example of the items covered, but is not a limit to the actual items covered on settlement day.  Our settlement officer is there for you, if you don’t understand something, stop them and ask them to explain it again. 

 

Will I have to take off work to attend settlement?

Although not necessary, it is prudent to allow a couple of hours of free time for before and after settlement.  With more and more lenders operating on the West Coast they tend to forget that we are 3 hours ahead of them and consider a settlement time based on their time zone.  We have received lender instructions from West Coast lenders at 8pm the day of closing with the comment, “we delivered it before close of business”.  Sad, but true!

 

Will I have to drive to your office?

We are more than willing to accommodate you at our location, but it is not necessary.  As long as we have an internet connection with email and fax capabilities, we can accomplish the settlement.  However, keep in mind, there will be a minimum of 5 people attending settlement so an office setting with a conference room is best.

 

What happens when settlement is completed?

After all the documents have been signed and the money has been disbursed, the buyer will get the keys to their new property and the sellers will receive a check and everyone will go on their merry way.

 

What if I have a question after settlement?

Feel free to contact the office or send an email to info@meridiansettlement.com