Do you ever wonder why title requirements differ so much from file to file? Title companies can be faced with several challenges based on the location of the property, defunct lending institutions and homeowners who received poor advice. Below are some examples of why a loan could be delayed.
Why do turnaround times on title commitments vary so much? In some states, title entities can go directly to the title plant to get all the information they need pertaining to the property, but in other states, title companies are at the mercy of abstractors. The difference between an abstractor and a title plant is that an abstractor will physically go down to the county recorder’s office or courthouse (depending on the state) and pull the documentation for title’s review.
When would a vesting issue create a delay? An example of this would be if a warranty/grant deed was recorded two weeks prior to opening title and the county recorder hadn’t updated its records to reflect the new owner or vesting. Another example would be if a grant deed was recorded against the property and it appears to be uninsured, meaning that a title company or an attorney didn’t record it. In this circumstance, title wants to know the purpose behind the deed and possibly have a new deed executed and recorded.
Why is a survey required on some properties and not on others? If title is having difficulty determining the legal description, a survey must be provided. A survey is performed by a licensed surveyor and is an exact measurement of the property. It plots out the exact dimension on a piece of property and a map, which is generally recorded at the county recorder’s office. Also, there are some states that are considered survey states, in which a survey is required on every transaction regardless of the legal description, but there are always exceptions to this rule.
What options are available if there is an old lien showing up on title and it’s causing delays because we can’t locate the payoff institution and the client has since refinanced? The best option would be to obtain a release of lien; clients may have received this from the lender and filed it away. You can also check to see if they obtained subsequent financing; the borrower can provide a copy of the previous HUD document showing that the loan was paid off or provide the final title policy. If all options have been exhausted and it is acceptable by state guidelines, the borrower can obtain a bond that would comply with state requirements or obtain a quiet title action.
If you want to expedite the closing process and prevent these roadblocks from happening, provide the following information at the onset of the transaction: -Statement of information -Social Security number -Last recorded deed -Tax bills -Credit report -Loan application -Bankruptcy information
Believe it or not, a title company’s goal is to help you get your loans closed, not prevent you from closing loans. Title companies never want to be the reason that a file is delayed. That is why it is important to communicate with your title agency from the beginning about your unique borrower’s situation and provide all the documentation they need so they can produce fast, accurate title commitments!