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Uninsured Title Products For Lenders—When Title Insurance Is NOT Needed

February 16, 2017 Due Diligence, Title Related Topics

As a lender, do you always need an insured title product with a corresponding title policy? Do you always need to pay for that premium?

The answer is:  it depends.

But in which situations might a title policy be 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. A “Two Owner” product, which is similar to 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 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? Contact us today! First Corporate Solutions works with our customers to first understand their needs, then creates a customized report that satisfies them.

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