Blogging About Loans: Title Insurance Centennial Colorado

Title Insurance Centennial Colorado

Once you find the property you wish to call "home", you AND the lender want to be given a full disclosure of ownership and liens associated with that property before the purchase transaction is completed. That information is provided in the form of an ALTA (American Land Title Association) policy. Unlike other forms of insurance that focus on possible future events and charge an annual premium, title insurance is purchased for a one-time payment expense and is a safeguard against loss arising from hazards and defects already existing in the title.

Prior to being issued a title insurance policy, a close examination of all public records that involve title to the real estate is done. The person, who is a licensed and bonded agent, conducting the search looks at past deeds, wills, and trusts to make sure the "chain of title" has passed correctly to each new owner. The examiner also tries to verify that all prior mortgages, judgments, and other liens have been paid in full.

If a problem (called a "defect" or "cloud" on the title) is found it must be corrected prior to closing. For instance, a previous owner sold the property 15 years ago. His wife was listed on the deed but for some reason did not sign-off at closing. Her interest in the property must be removed to clear the title. A title search should uncover other potential problems or nuisances, such as rights another may hold (right of ways, view easements, power line easements, mineral rights), claims by prior undisclosed heirs, and pending legal actions.

Title insurance protects you against problems that did not show up during the title search or were missed by the examiner, or errors in public records. A title insurancepolicy does not cover defects that occur after you purchase the property. Also, policies often exclude issues having to do with easements, mineral and air rights, and liens. As your lender, we'll be sure to review all exclusions and exceptions before you ever go to closing. After all, as the lender, we have an interest in the property as well! That's why there are actually TWO policies issued -

• A lender's title insurance policy will be issued for the amount of the mortgage. It pays the lender if a problem surfaces.  
• An owner's title insurance policy covers the property's full sales price and insures the owner against loss.

Typically here in Centennial, it is the responsibility of the seller to provide you with the owner's title insurance policy. And as a part of the agreement in assisting you with the financing of the property, you provide the lender with the lender's title insurance policy.

For more information on closing procedures on properties in Centennial or in the Denver area, please feel free to contact me!