Title insurance is a crucial component of real estate transactions. It provides protection to both buyers and lenders against potential legal claims or disputes over the property's title. The issuance of a title policy is a critical step in this process, and as an escrow officer, you play a pivotal role in facilitating this.
Title policies come in two main types: owner's policies and lender's policies. An owner's policy protects the buyer's interests, covering the purchase amount of the property. A lender's policy, on the other hand, protects the lender's interests up to the loan amount. It's important to understand the differences between these policies and the specific protections they offer.
As an escrow officer, your role in policy issuance is multifaceted. You are responsible for ensuring that all necessary documents are in order and that all conditions of the title insurance contract have been met before the policy is issued.
Your duties include:
Reviewing the Title Commitment: The title commitment outlines the terms under which the title insurance company will issue a policy. You must review this document carefully to ensure all conditions are met.
Clearing Title Exceptions: The title commitment will list any exceptions, such as liens or easements, that are not covered by the policy. It's your job to resolve these exceptions whenever possible.
Preparing the Policy: Once all conditions are met and exceptions cleared, you will prepare the title policy. This includes filling out the policy form with the correct information and ensuring the correct premium is charged.
Issuing the Policy: After the policy is prepared, you will issue it to the insured party. This typically involves sending the policy by mail or electronically and recording the issuance in your records.
Despite your best efforts, issues can arise during the policy issuance process. These might include discrepancies in the property description, unresolved title exceptions, or errors in the policy form. It's important to address these issues promptly to avoid delays in the closing process.
If you encounter a problem you can't resolve on your own, don't hesitate to seek help. Consult with your supervisor or the title insurance underwriter for guidance. Remember, your primary goal is to ensure the policy is issued correctly and provides the necessary protection to the insured party.
In conclusion, the role of an escrow officer in title policy issuance is crucial. By understanding your responsibilities and addressing issues promptly, you can help ensure a smooth closing process and provide valuable protection to buyers and lenders.