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When Is A Title Policy Unnecessary? Uninsured Title Products For Lenders

May 03, 2018 Due Diligence, Title Related Topics

Is an insured title product with a corresponding title policy always required for a lender’s purposes? Is it always required to pay that premium?

The answer is:  it depends.

So when is an uninsured title product OK? When is a title policy unnecessary?

Lender title products usually come in three variables, depending on the lender’s risk considerations.

  1. An “Update” product, which is just what it sounds like, an update to a previously issued policy which has examined and reported title up to a certain date.
  2. An “Owner and Encumbrance” product which is a search from the current ownership deed acquisition *(full value, arms-length or acceptable whole interest starting point) forward.
  3. “Two Owner” product, which is like the “Owner and Encumbrance” search in context but includes the immediate previous owner along with the current owner in the title search. This expands the search period to address any prior matters not removed from the prior owner (old deeds of trust, ucc-1’s tax/judgment liens) and uses the same search criteria as listed above in #2,

All three of the above, depending on your risk management objectives and demands, may not need a policy. In those cases, you can still receive all the information you require but save yourself a lot of money by employing the services of a National Title Research Company.

Want to learn more about saving money on your title search due diligence without sacrificing compliance? Please contact us today! First Corporate Solutions works with our customers to first understand their needs, then creates a customized report to satisfy them.

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