What is the effective date of a title insurance policy and why is it important?

What is the effective date of a title insurance policy and why is it important?

Title insurance only insures title as of a certain date, for example, the effective date of the policy. It is important that the effective date for an owner’s policy be the date of the recordation of the deed to the owner and that for a loan policy, the effective date be the date of the recordation of the mortgage.

How long is a title commitment good for in Texas?

BUILDING BLOCKS OF A TITLE COMMITMENT In order for the Commitment to be valid, the proposed insured’s name and the policy amount must be shown in Schedule “A”, and an authorized representative must countersign the jacket. The Commitment expires ninety (90) days from the effective date of the Commitment.

How long is a title commitment good for FNMA?

1 to 90 days
Commitment Periods Commitments to deliver most loan products can be taken for 1 to 90 days.

How do you read a title commitment report?

Download & Print

1. The estate or interest covered.
2. The record owner of the estate or interest.
3. A legal description of the parcel of land covered.
4. Requirements and Notes.
5. The easements, liens, encumbrances and other matters which affect the title to the land at the date and time of the report.

What’s the purpose of title insurance?

Title insurance is a contractual obligation that protects against losses that occur when title to a property is not free and clear of defects (e.g. liens, encumbrances and defects that were unknown when the title policy was issued). Title insurance also guarantees loan priority.

What is the difference between title commitment and title policy?

When it comes to a Title Commitment vs Title Insurance Policy, the one major difference is the commitment is issued BEFORE closing and all items in the Schedules must be satisfied. After the closing occurs, THEN the Title Insurance Policy is provided to the buyer(s).

Does Fannie Mae require title insurance?

Fannie Mae requires a Mortgagee Policy of Title Insurance (Form T-2), supplemented by an Equity Loan Mortgage Endorsement (Form T-42) including the optional coverage provided by Paragraph 2(f) and a Supplemental Coverage Equity Loan Mortgage Endorsement (Form T-42.1).

What is the difference between a title report and title commitment?

A title report is the result of the title search and is often a section of the title commitment as well as the final title policy that is issued following closing. Title reports typically are not issued during the homebuying transaction and are generally not used during the closing.

What does the effective date mean in a title?

The effective date is the “cover” date of the search on which the title insurance commitment is based. The cover date is the date through which the courthouse records were available.

When does a title commitment need to be issued?

June 10, 2016 In Title Insurance. Lenders must have a good understanding of title insurance. A title commitment is a preliminary document issued to a buyer and lender prior to closing which states the conditions that must be met in order to issue a title insurance policy — to include any exclusions or exceptions.

How to check the accuracy of a title commitment?

Begin by checking the accuracy of important details, make note of exceptions, and be certain you plan the required actions (to remedy title exclusions in a timely manner) before the closing date. Legal Description Matches Purchase Agreement & Physical Address of Property

What does the cover date mean in a title?

The cover date is the date through which the courthouse records were available. For instance, let’s say the abstractor goes to the courthouse to do the search on July 15 but the available records in the Recorder’s office are really behind – perhaps only indexed through June 30. [That really would be terrible, but it happens.]