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What is Title Insurance?

Title Insurance protects you, the owner of property, and insures that you are the rightful owner of
Your property, and that there are no liens or other encumbrances affecting your property that
could result in financial and tangible losses to you. In other words, nothing exists that could
devalue your property by forcing you to pay for things that should have been paid for by prior
owners, or by limiting your ability to use your property as you would like.

Primarily there are two types of title insurance policies. The Owner's Policy is designed for the
owner of property; and the Lender's Policy is designed for mortgage companies, or banks which
lend money where the property is used as collateral. In addition to insurance that an owner is the
rightful owner of a property and that there are no liens or encumbrances against the property, the
lender's policy covers the lender for monetary loss they may incur if their mortgage lien does not
hold the priority position it intended to hold.

How does one obtain title insurance?

In order to issue title insurance, title companies require that a title search of the property be
performed. Every document that is created which affects property is presumed to be recorded at
the Recorder of Deeds Office (sometimes referred to as Land Records, or Public Records) of the
Court House in the county where the property is located. A title search is the collection of all the
documents that are recorded at the Recorder of Deeds office which affect title to a particular
property.

Using the information acquired in the title search, a Commitment for Title Insurance is prepared.
The Commitment is a commitment to insure apiece of property, subject to certain conditions that
will have to be taken care of prior to or during settlement.

The Owner's Policy of Title Insurance is available for anyone who purchases property. It is not
mandatory, but it is recommended. Most commercial lenders will require a Lender's Policy in
order for them to lend money for the purchase or refinance of property .It is the buyer's or
borrower's responsibility to purchase the Lender's Title Insurance Policy, whether or not an
Owner's Policy is purchased.

How much does title insurance cost?

Premium rates paid for title insurance are based upon the purchase price, or loan amount, which
will be the amounts insured on the policies. In Pennsylvania, the rates for title insurance are
standard rates, regulated by the Insurance Department of Pennsylvania. Rates are filed on an all
inclusive system, which means they include not only the cost of the title insurance premium, but
also the cost of the title search and the closing, or settlement fee. We can provide coverage to you
under several different fee arrangements.

What is closing, or settlement?

When you purchase property, initially you sign an agreement to purchase the property. Once that
Is done, all the inspections, loan application and approval process, appraisal and all other
Documentation must be collected. When that has all been done, you are ready to go to settlement
On the property. Settlement is the time you sit down with the sellers of the property and sign all
the final documentation transferring the property to you. It is also the time the sellers hand you
the keys.

When you refinance, initially, you will apply for your new mortgage. Inspections, appraisal, loan
approval and all other documentation must be collected. When that is complete you are ready to
go to settlement. At settlement you sign all the final loan documentation for your new loan.

What is the role of the title company at settlement?

The title company coordinates all the documentation that needs to be signed at closing. They
make sure all the required items shown on the Title Insurance Commitment have been taken care
of. They sit at the table with you and explain to you the documents you will be signing and
answer any questions you may have. They are also responsible for all the money that exchanges
hands between the buyer, seller and lender and they pay all bills associated with the transaction.

After settlement is complete the title company will make sure your new documents are recorded
at the Recorder of Deeds office. After they have been filed, the original documents will be
returned to the title company. The title company will produce the Title Insurance policies and
forward them to you, or your lender, along with the original recorded documents.

How do I select a title company?

For residential property, federal regulations mandate that it is the buyer's choice who handles
their settlement. Because rates and fees are mostly the same no matter what title company you
select, you should select a title company you feel comfortable with, a title company you can rest
assured will do everything the right way to protect y
ou.

Do I need an attorney?

Freeland Abstract recommends that if you would like an understanding of the legal obligations created by the documents that you are signing at settlement, you should contact an attorney experienced in the field. Freeland Abstract recommends the law firm of Keenan, Ciccitto & Associates as a local firm experienced in real estate.