Title insurance helps protect your investment from unforeseeable title problems. Lenders often require title insurance to protect their mortgage interest in the property. Owners can also buy insurance that will protect their ownership interest, for as long as they own the property.
Title insurance helps protect you from defects to the title that may not be discoverable, such as:
- Forgery of documents
- Fraud in execution of documents
- Undue influence or mental incapacity of the grantor of a deed
- False impression of an owner or confusion from same or similar names
- Unconveyed interests of a missing spouse or undisclosed heirs
- Errors in surveys or legal descriptions
- Unsatisfied claims not shown on the record
- Deeds executed under an expired or false power of attorney
- Incorrect indexing of the County land records
- Clerical errors in recording of legal documents
Want to know how much title insurance may cost you?
As agents for the Chicago Title Insurance Company, we can issue lender’s and owner’s title policies. Let us know how we can help you!
Title Commitment
A title commitment is the report from a title exam and is issued when title insurance is being purchased.
The commitment will include basic information about the property, like the description and current record owner, and it will also include requirements and exceptions.
Requirements
Title requirements are matters which must be resolved prior to any title insurance being issued. It might be something general like a deed being executed by the parties and recorded, or it can be something more complex like clarification of a title defect (e.g., missing marital status on a prior deed) or liens which need to be paid and released (e.g., a mortgage, delinquent taxes, or a court judgment lien).
You should always review the requirements section of the title commitment to ensure that anything that needs to be addressed prior to closing is. Should a requirement not be met, then title insurance may not be issued or, in some cases, may be issued with the requirement becoming an exception to title insurance coverage.
Exceptions
Exceptions on a title commitment represent matters of record for which title insurance will not cover. These most often include subdivision restrictions or easements that may or may not be recorded.
Closing Protection Letters
A closing protection letter (CPL) indemnifies a party by the title agency for any action or inaction taken by the settlement agent or closing attorney that adversely affects the title or the validity and priority of a mortgage lien and creates a loss therefrom.
Please let us know when ordering a title exam if you require a CPL.
Title Opinion Letter
A Title Opinion Letter differs from a title commitment in that it does not come with an offer or guarantee of title insurance. Title opinions relay the same kinds of information as disclosed in a title commitment, such as title defects and liens, as described above.
You may still choose before closing or even after closing to buy title insurance. Just let us know, and we will discuss with you the requirements to obtain it.
Title Insurance
Chicago Title Insurance Company issues both Lender’s and Owner’s Title Policies to help protect either the mortgagee’s interest or the purchaser’s interest (or both if both are bought). Purchasing both policies simultaneously offers a significant discount.
Title Endorsements
A title endorsement is an amendment to the base title insurance policy that provides added protections, exclusions, and other policy language. Some of the most common ones include:
- ALTA 6-06 – Variable Rate Mortgage
- ALTA 7.1-06 – Manufactured Housing – Conversion; Loan
- ALTA 8.1-06 – Environmental Protection Lien
- ALTA 9-06 – Restrictions, Encroachments, Minerals
It’s important that you communicate which endorsements will be needed to be sure that we give a correct estimate of costs.