Posts Tagged title insurance
What is Title Insurance? What is Title Insurance used for?
Posted by Top Home Loans in General Business, Mortgage Advice, Mortgage News, Real Estate on July 1, 2009
Title insurance is designed to provide comprehensive insurance against risks associated with home buying. Some of these risks associated with home buying include zoning issues, claims of mental capacity, lack of an up to date survey, incorrect legal services, and claims to title. It also insures against title defects that could occur. For example, there could be ownership claims, liens, undischarged mortgages, consents, and other related title issues. It will also cover compliance’s issues and issues with access. For example, some of these issues could include work orders, boundaries, tenancies, rights of way, and certain easements. This type of insurance will remain in force for as long as the purchaser owns the property. The title insurance will is also supposed to outlive the certification of your lawyer. Usually, insurances stop if the person who certifies the insurance passes away or stops practicing law.
The first thing to understand is that title insurance provides an insurance title. It does not provide a marketable title. This means that if something is wrong, and a prospective purchaser will not accept a new title insurance policy at no cost and provided the insurer does not go bankrupt. The insurer will either payout on the policy or will repair the defect to the title. Overall, it does not matter what the title says, as long as the home purchaser is willing to purchase title insurance coverage. Most people would rather purchase an insurance, then spend a lot of money completing a full assessment on the property. Most title insurance companies that operate in Canada have originated in the US. This assumes that there is plenty of demand for title insurance.
Title insurance can be a valuable and effective tool if used correctly; however, some companies deliberately and effectively try to persuade many peoples school of thought. By using some programs offered by lawyers and title insurance companies, it can literally save the home purchaser hundreds of dollars in closing costs. These costs can vary wildly between lawyers, so when asking about title insurance, make sure that you get a quote for both your lawyer, and the title insurance costs. Also, some companies claim to be ‘closing centers’. These companies will do only the bare bones work at a low price. Lawyers are usually cut a deal to sign there name on the bottom line. This is not correct because the lawyer actually needs to do there job correctly, instead of just getting paid to sign.
A great advantage of title insurance is in regards to older homes. Some older homes have been registered under the Registry System where a adjoining property search and a 40 year search to a good root of title is required.
In Ontario, the full electronic registry system will be the normal process. It is expected that title insurance will occur in all transactions, and will be completed by computer processing. When selecting a lawyer, make sure that they have completed all the required title insurance courses, have completed Terranet courses, and have a full working knowledge of the electronic registry system, so they can advise you correctly. A closing center does not have these details, so they cannot properly advise you. The Law Society had passed a rule that requires the lawyer to properly inform the home purchaser of all the details on title insurance, and how title insurance works. A lawyer will be able to refer back to you later and advise you if there is any trouble. Also, if you have found a good lawyer, then make sure that you refer them business. Referral business is how a lawyer survives.
The lawyer has the full responsibility to inform you of all the details involving title insurance. Make sure you choose a lawyer that is well informed on the topic, and make sure that they have all the necessary qualifications to complete your transaction as easily as possible. Consider your options carefully before coming to a decision on title insurance.
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How to Avoid Mortgage Fraud in Canada
Posted by Top Home Loans in Mortgage Advice, Mortgage News, Real Estate on November 29, 2008
Mortgage fraud should be of concern to all home owners. Even if you are unaware that a transaction is being completed in your name, then you could still end up with the bill or even lose your house. The method of which the scam is completed is done without the home owner knew anything was even going on in the first place.
How the Fraud Works
The method that individuals commit the fraud in Canada is completed by the following process:
- An imposter poses as a home owner or relative and claims that they have title to the property.
- The imposter then sells the property to another fraudster in on the deal.
- The person who is buying the property then goes to the bank to get a mortgage on the property and all parties completely disappear with the banks money.
This fraud only works if you fit two major criteria:
- There is only 1 person on the title (easier to impersonate one person over two)
- The house is paid in full (no banks will have liens on the property)
If you fit this criteria, then you are the most at risk for this particular mortgage fraud. All a fraudster needs to know is some basic information about you.
How does the Fraudster get this Information?
The people acting in this operation will come through file after file at the land title office for people that fit this criteria. Once they have discovered a person that they are looking to complete the scam with, then they will make the necessary documentation and proceed with a sale of the property.
If the fraudsters delegate the correct front people and have appropriate lawyers, then they will actually be able to complete the request with little to no resistance.
How can you Protect Yourself?
Protecting yourself from mortgage fraud is actually very simple. The best way to protect yourself is to carry a mortgage on the property; however, after paying your mortgage off, you will have to discharge your mortgage. Once this is completed, you can still allow the bank to keep a lien on your property by opening a secured line of credit on your property. Even if there is no balance on the line of credit, then you will still be protected because the bank has a lien on the property.
The second way to prevent this type of fraud is by purchasing title insurance. Title insurance is a great way of protecting the things that you own from fraudulent activity and hostile claims to your properties. Many lawyers, realtors, and other real estate professionals will be able to provide you more info on how and where to get title insurance.
Mortgage fraud is a type of fraud that has rarely happened in the past; however, if it does happen, then you want to ensure that it does not happen to you. Make sure that you take the necessary precautions to protect your family from potential fraudulent activity. If you need to pay the money for title insurance, then you should, for it may avoid losing hundreds of thousands of dollars from a fraud.
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The Lawyer in the Mortgage Process
Posted by Top Home Loans in Mortgage Advice on October 23, 2008
It is a well known fact that people like to complain about lawyers; however, this is usually because they do not understand the process the lawyer has to complete in order to close on a property. A good lawyer will be the one that makes sure that you have a thorough understanding of the process and helps you every step of the way.
The first thing you should do is identify what expectations you have of your lawyer, what cost you are expecting, and determine exactly what you are paying for. Make sure to get a quote in writing before beginning the process indicating what you are paying for and why. This must include all the necessary steps, and also have them include any other fees that may present themselves during the process. You need to make sure the lawyer only completes tasks that are important and does not include fees that you do not require.
A lawyer values his work based on time. A lawyer will present a fixed fee quote of what the determination of time will be to complete a task. If some other required task comes up, then the lawyer will have to reassess the quote to handle the reallocation of time spent to complete the fle. Anything beyond the initial quote will be valued on a hourly basis.
Standard Legal Tasks
- Reviewing the completed agreement of purchase and sale; however, this does not include negotiations, amendments to the agreement, or advising the client thereof.
- Advising the client on how to review necessary documents.
- Investigating title, checking the description, making requisitions on the title, and all other issues detailed on the agreement of purchase and sale.
- Searching for arrears of realty and all other taxes and rates constituting statutory liens, and removing these liens before property transfer.
- Advising on tax legislation and application.
- Conducting a search for any executions.
- Retrieving and assessing status certificate only directly from the seller.
- Reviewing transfer and preparing one charge to be either given back or taken.
- Reviewing the adjustments statement and arranging for title insurance if necessary.
- Arranging for closing, reporting, providing title policy and all other services necessary incidental.
- Answering all questions pertaining to zoning, title, occupancy agreement, participation, and responsibility while living in the location. Also, explaining all necessary documentation fully.
- Examining unit plan, and examine all necessary by-laws, work orders, zoning laws, and all other laws. This will be disclosed fully to yourself.
This list is for primary mortgage activities and does not include second mortgage activities or tax information. Many other matters could come up, and the lawyer will have to discuss those as they come up with you.
Legal Confusion
It is easy for matters dealing with the lawyer to get confusing if things are properly laid out from the beginning. Make sure that when you first get the initial quote, you are aware of what you are paying for, what you will receive as part of the package, and what other additions might come up.
Have the lawyer inform you what his hourly rate is and plan for the worst case scenario when it comes to legal costs. If you end up receiving the best case scenario, then you will be extremely satisfied with your lawyer’s work because you will assume that you have saved money by preparing for the worst case scenario. Also, always make sure to compare several lawyers fees before deciding on one lawyer to complete your file, this will save you a lot of money in legal fees.