What is title insurance?
A title is your foundation of property ownership. It is the owner’s right to possess and use the property. In order to transfer a clear title to a piece of land, it is essential to determine whether any rights to the property are outstanding. The purpose of a title insurance policy is to protect the insured against loss if problems in title arise. There are two types of title policies: Lender’s Policy (providing protection for the loan secured to purchase the property) and an Owner’s Policy (protects homeowner against any problems not uncovered in the title search).
What is a title search?
A review of all recorded documents affecting a piece of property to determine the present condition of the title.
What is a title abstract?
A history of the property title as revealed in the public records. These records may contain errors and do not disclose “hidden” hazards that can threaten your property.
Isn’t a deed proof of ownership?
Not necessarily. A deed is a document that shows that the right of ownership was conveyed. It does not establish proof of ownership, as others may claim interest in the property; and a deed does not identify liens or claims that may be outstanding against the title.
What happens if a claim is made against your property?
In accordance with the terms of your title insurance policy, you will be afforded a legal defense, which may pay all court costs and related fees. If the claim is proved valid, you will be reimbursed for your actual loss up to the face amount of the policy.
What is a HUD-1 Settlement Statement?
A form required under RESPA (Real Estate Settlement Procedures Act) to be used in conjunction with settlements in the United States that involve any federally related mortgages. Typically, it is used as the standard form in real estate settlements to give the accurate accounting of the transaction. The settlement agent is responsible for preparing the HUD-1 and closing the transaction in accordance with accompanying documents.
