Preliminary Title Report.
Written by:
Angelina Johnson,
NAMP Volunteer Writer
As all states differ when it comes to the format, it is basically the same. Each guarantees ownership and search for liens and encumbrances, eastments and other information that might affect the chain of title. Most people do not realize the importance of having a title report done but it is here to stay. As prelim is sought after on any property that will be mortgaged, the beneficiary of such is ultimately the borrower.
As one prelim is never identical with another, title companies has to exhaust all resources to make sure they are not writing a policy with undisclosed items. Some states are in better shape than another as the public records are readily available.
When reviewing the prelim, we must be certain that the legal description is indeed the subject property. Thereafter, review all other items. Constantly, you will see items referring to prohibition base on age, sex, race etc, public utilities and mineral rights. These are common exclusions title set out in their report. Eastments, eminent domain, CC&R are other examples that may be dependent on the property itself. The lien/s against the property is/are what lender look for to assure a clean chain.
If Multiple liens exist, lender will seek out what position the loan is intending to be in and do accordingly. A subordination agreement maybe required. Liens such as SBA loans that some self-employed borrowers might have are usually the last lienholder with some exceptions.
Whatever your situation might be, it could not be expressed enough that as processor or loan originator, it is important to review most of the documents that you show lenders to avoid surprises in the future.
About the Writer. As one of NAMP's volunteer writers, Angelina Johnson is currently a NAMP member in good standing and has applied for her CMLP certification with NAMP. Feel free to email Angelina at: angelina@mortgageprocessor.org. Or, if you would like to become a volunteer writer for NAMP, please email us at: blog@mortgageprocessor.org.
Angelina Johnson,
NAMP Volunteer Writer
As all states differ when it comes to the format, it is basically the same. Each guarantees ownership and search for liens and encumbrances, eastments and other information that might affect the chain of title. Most people do not realize the importance of having a title report done but it is here to stay. As prelim is sought after on any property that will be mortgaged, the beneficiary of such is ultimately the borrower.
As one prelim is never identical with another, title companies has to exhaust all resources to make sure they are not writing a policy with undisclosed items. Some states are in better shape than another as the public records are readily available.
When reviewing the prelim, we must be certain that the legal description is indeed the subject property. Thereafter, review all other items. Constantly, you will see items referring to prohibition base on age, sex, race etc, public utilities and mineral rights. These are common exclusions title set out in their report. Eastments, eminent domain, CC&R are other examples that may be dependent on the property itself. The lien/s against the property is/are what lender look for to assure a clean chain.
If Multiple liens exist, lender will seek out what position the loan is intending to be in and do accordingly. A subordination agreement maybe required. Liens such as SBA loans that some self-employed borrowers might have are usually the last lienholder with some exceptions.
Whatever your situation might be, it could not be expressed enough that as processor or loan originator, it is important to review most of the documents that you show lenders to avoid surprises in the future.
About the Writer. As one of NAMP's volunteer writers, Angelina Johnson is currently a NAMP member in good standing and has applied for her CMLP certification with NAMP. Feel free to email Angelina at: angelina@mortgageprocessor.org. Or, if you would like to become a volunteer writer for NAMP, please email us at: blog@mortgageprocessor.org.
posted by Editor in Chief at 12:00 PM
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