(This post is part two in a series focused on giving an in-depth look at exactly what happens behind the scenes at a title company. I have drawn upon my own 4+ years of experience as a title processor/real estate paralegal in southern Maine in writing this series. Please be aware that things could vary according to what state you are in.)
Whether you're a loan processor, mortgage broker or real estate agent, you're all familiar with that point in time when the file gets sent to the title company. How many of you know what really happens once it gets there? Pssst...I'm going to give you a top secret peek into exactly what happens to your precious file once it reaches the title company, and as I do so, give you tips on how you can help make the processes go smoother. Let's begin.
You either fax or e-mail your 'title order' to the title company. And what exactly should a title order consist of?
#1. The actual title order sheet. This sheet should include your name and contact information, the borrower's name and address. The property address including the county it is in, the amount of the loan, the name of the Lender, if it's a purchase transaction the sales price, the sellers name and address, any real estate agents involved and their contact information.
#2. If this is a purchase transaction you should include a copy of the purchase and sale agreement and any other supporting documentation that may assist in the title search. For example, a current deed or deed reference, condominium association contact information, copy of resale certificate, etc. An anticipated closing date should also be included. Remember, the more information you can give the better.
#3. Again, if this is a purchase transaction, you should know if the Lender requires a Mortgage Loan Inspection Plan or survey. If it is a requirement of the loan, let the title company know this. Even if you don't find this out until after you've sent the order, contact the title company as soon as you are aware this is a requirement. This simple step can help you and your clients avoid big headaches later on. The earlier the title company can order a survey/MLIP the better. We'll go into further detail in another post, just suffice it to say that this is crucial. Also, some buyers in cash purchase transactions may decide they want a survey/plot plan done as well. This is something you should ask, and encourage even with the additional cost. Encroachments, zoning infractions and the like are uncovered by having one completed. It is a wise choice and well worth the cost.
Upon receipt of the title order, the processor immediately orders a 'title abstract or title search' to be completed. Sometimes a title company will have an in-house abstractor who completes title searches, but equally as common is outsourcing this step to independent, freelance abstractors. Title searches encompass searching the Registry of Deeds in the county the property is located in. Depending upon what is found, and abstractor may also need to follow up at county courthouses in the case of judgements, etc. associated with the property. In the state of Maine, many title searches still require an actual visit to the Registry or Courthouse in question as not everyone has the information indexed online yet. This process is also called the 'title exam' or 'title examination".
The next post in this series will tell you what the title processor is doing besides waiting for these items to be completed.
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