The Role of a Mortgage Title Company and the Importance of Mortgage Title Insurance
A mortgage title company is a company that handles the title search requirements of mortgage providers. If you represent a bank or mortgage company, a mortgage title company is one of your best allies, offering title searches tailored to the requirements of lenders who want to find out whether the title of the property that they invest their money in is worth the risk. Mortgage title companies involve a fee that will have to be paid by the borrower, alongside the many other costs that are added on top of the repayment costs and the interest rate. Unfortunately, as a borrower, you can’t avoid paying the mortgage title insurance fee, and that fee along with the mortgage title company and the service packages they provide, will all be established by the bank.
What Is Mortgage Insurance?
Mortgage title insurance is different from owner title insurance in that it is required for the peace of mind of the bank, and not that of the buyer or seller. The idea behind it is that any lender willing to part with a considerable amount of money, like the one needed to procure a home, needs to have some form of assurance that they won’t lose the money they invest. This can happen if there are unpaid taxes or active liens on the property, or if the seller doesn’t actually have the right to sell the home. In such cases, without proper title insurance, the lender could end up losing their money. As a result, mortgage title insurance services are geared towards the needs of the lender, providing specific benefits that allow for the uncovering of any discrepancies associated with the title of the property at hand.
The Responsibilities of a Mortgage Title Company
Title company employees have the task of looking through electronic and paper records in order to uncover any issues with the title of the property. This often means rummaging through old documents, finding records of old tax payments, making sure the previous owner’s debt was resolved as well as looking through county court documents, wills and documents attesting of deaths, divorces and other events that might have had an impact on the title.
Do They Support the Mortgage Lender or the Buyer?
A mortgage title company typically serves the bank or mortgage lender. As a borrower, you likely won’t even know the company’s name or the services that they provide. However, if you want the loan to go through, you will have to abide by the lender’s terms and accept the fee that represents the payment the lender will offer in exchange for services like mortgage title insurance searches meant to uncover undesirable hidden issues with the property title and deed. The good news is that the fee is not too expensive, and the mortgage lender will be required to provide you with information about the title insurance you pay for, if you ask for it.
Mortgage Insurance and Truth in Lending
After everything is finished, you will get a truth in lending document from the lender, which will include information such as the amount the bank agrees to finance, the APR and the total amount of fees to be paid. Once the mortgage title company has done its job, it’s the lender’s responsibility to provide the borrower with the truth in lending disclosure and informing them of the amount of the loan and all the final costs – including the fees required for mortgage title insurance.