Mortgage News by Lee Maynard

In today's high tech world of communication nothing can match the pure unadulterated pleasure of receiving a hand written "Thank You" note delivered by the U.S. Mail.

As a society we have moved away from slow moving forms of correspondence and replaced them with email and text messaging.  While these are perfect for most dialogue they truly fall short when it comes time to express your thanks for someone's thoughtfulness or extra effort.

Imagine trying to convey your sincere thanks in an email that shows up in the recipient's inbox sandwiched between messages promising increased libido and growth enhancing hormones and you get the idea.

A properly written and delivered thank you note will help you stand out from the others and receiving the same will make you feel like a million bucks.

Invest a few dollars in some nice generic Thank You cards and send them out to your friends, coworkers and mortgage professionals (shameless plug)whenever you feel that they deserve a little extra recognition.  You'll be amazed at the results! 

Lee Maynard

What the Heck??? is the name of my new series designed to answer some of the age old questions concerning the mortgage industry.  To that end I submit the first of many such articles...

What the Heck is Title Insurance???

Almost everyone that owns a home also has some form of title insurance.  Since nearly all of us have it perhaps it would be a good idea to have a better understanding of it.  What is it?  Where does it come from? and How does it protect me? are questions I have been asked over and over again.

For those of you who prefer the cliff notes please read the following:

Title Insurance protects you, the owner, as well as your mortgage lender from anyone exercising a claim against your property.  If the claim is found by the courts to be legitimate your title policy will reimburse you for the loss of your property due to that claim. 

End of Cliff Notes.  Here... is the rest of the story!

Let's start with the basics... Title Insurance can be thought of as an insurance policy that protects those with an interest in clear title to real property.  Boy, that sure clears things up!  Not really so I'll continue.

Title insurance will protect (indemnify) those that have a bona fide interest in real property by insuring against the risk of a previous interest.  Property owners of record and mortgage lenders both have a bona fide interest in making sure that the property they own and/or lend money on has clear title.

Clear title can be described as a title free of any encumbrances.  An encumbrance can be described as anything that would allow someone else to have an interest in your real property.  Liens, mortgages, judgements and prior sales are just some of the encumbrances that can be found when the public records are searched to determine whether a property has clear title.

Since clear title is desirable and clear title can only be obtained if the title is free from encumbrances then how do we determine that there are no encumbrances?

Title companies employ searchers that comb public records to determine any claims that may have been recorded against your property. Their report to the title insurance company will determine whether or not the company will insure your title and warrant that is free of defects.

Lenders require a "lenders policy" that protects them in the event that someone produces a claim against the title.  This policy is a requirement by all lenders and is the sole reason that title insurers have really nice houses!

Owners policies are not required but most title companies will provide this coverage to the new owner for a nominal fee.

In today's litigious society title insurance is a necessity.  It adds a great deal of cost to the real estate transaction but when weighed against the risk involved by not obtaining title insurance the benefits far outweigh the risk.

Wake up!  Nap time's over!

Until next time, I hope you have enjoyed this installment of What the Heck???

Lee Maynard