Monthly Archives: July 2013

Concurrent Closings

What is a Concurrent Closing?
A Concurrent Closing is the term used to define two or more properties dependent on each other to close. For example, the first property funds and records and the proceeds from that transaction are used to fund or partially fund the second transaction. Sometimes concurrent recordings exist in which the second transaction is not dependent on funds from the first transaction. In this case, the two record back to back without any delay.

Do you have to use the same Title and Escrow Companies on all transactions?
No, you don’t, although it can make things easier. The normal procedure on a single transaction is to fund the new loan, record the documents and then send the proceeds via wire or check to the escrow company. When a concurrent closing is involved, time is of the essence. If both transactions use the same title and escrow companies then no money needs to move locations. If different title and escrow companies are used, then those companies need to communicate with each other. At the close of the first transaction, escrow instructs their title company to forward funds directly into the second transaction. This process saves valuable time by avoiding the process of wires being transferred back and forth between two Escrows and two Title Companies. Once the second title company verifies receipt of the funds, they can go ahead with their transaction.

What is the key to a successful transaction?
Communication is the key. At California Title Company, our goal is to help you succeed. By communicating your needs to your escrow and title companies, all parties involved can work together to ensure a successful close.

This information is deemed reliable, but not guaranteed.

Be Aware When You Are Dealing with a Seller & a Bankruptcy

A Judgment Lien Appearing on Your Prelim May Not Have Been Removed

Common Situation Explained:
A situation that arises fairly often when a title company is requested to insure a transaction is where an Abstract of Judgment has been recorded against the seller and the seller has subsequently received a discharge of the debt in bankruptcy. Unfortunately, the discharge of the debt itself does not eliminate the lien of the recorded Abstract. Once the Abstract has been recorded, the judgment lien can only be eliminated by a separate Bankruptcy court order known as an “Order Avoiding Lien”.
 
Although the bankruptcy discharge may have relieved the debtor of personal liability, it does not eliminate the judgment lien. In other words, even though the creditor can no longer satisfy the judgment by attaching the debtor’s wages or other assets, a judgment lien that arose prior to the bankruptcy can still be enforced against the real property, even if it has been sold or transferred to a third party. For this reason, a title company will not “insure over” the lien without either a proper Order Avoiding Lien from the Bankruptcy Court or a release of the lien by the judgment creditor.
 
However, once the debtor has received a discharge in bankruptcy, the judgment lien will not attach to any property that the debtor acquires after the date of the discharge. In that case, the judgment lien may not be a concern to the title company.
 
If you are dealing with a seller who has had a bankruptcy, contact California Title Company for information on what’s needed to close on their specific property.

This information is deemed reliable, but not guaranteed.
 
Legal counsel should be consulted for advice in specific situations.

How to File a Title Insurance Claim

WHAT SHOULD I INCLUDE?

Statement of the Claim: Include a brief, specific explanation of your insurance claim.

Property Information: Include the full property address (this is required to begin a review of any claim request).  If the street address is not available, please include the legal description or the Assessors Parcel Number of the property in question.

Claimant Contact Information: In order for the underwriter to respond to your claim request, please include your name, address, telephone number and email address, if available.

Supporting Documents: Please include a copy of the title insurance policy, copy of the final settlement statement or HUD 1, copies of supporting documents that you feel support your claim request.

 
WHERE SHOULD I SEND THE CLAIM?

Review the portion of your policy stating “How to Make a Claim.”  Submit the above information to the underwriter as mentioned in your title policy and address your claim to the Claims Department. Send your request through certified mail so that you can document and track the status of your claim.

Your claim will be handled by the claims department and may not be handled through a local title insurance branch. All questions should be directed to the claims department.

This information is deemed reliable, but not guaranteed.

Why Does My Transaction Require Two Title Policies?

Nearly every sale of a residential property involves the purchase of two policies of title insurance, an Owner’s Policy and a Lender’s Policy.
 
FOR THE SELLER
The purchase of a home may prove to be the largest single financial investment many people may make in their lifetime. Your buyer will want to make sure that the property is indeed yours to sell and that no one else has any lien, claim or encumbrance on your property. An Owners Policy, typically paid for by the seller, insures that you have right to pass clear title on to the buyer, as well as protects them against certain issues that may arise after the close of escrow.
 
FOR THE BUYER
For most of us, buying a home requires help with financing the purchase price. Your home loan is secured by the new home you are buying. Your lender will want to know that the property they are involved with is insured against certain title defects and that you are the owner of record. The Lender’s Policy of title insurance, typically paid for by the buyer, insures your lender, and any purchasers or assigns of the loan, that their lien has priority over other liens not shown in the policy. Many lenders condition their loans upon the purchase of a Lender’s Policy.
 
REAL ESTATE CUSTOM & PRACTICE
With title insurance there are no continuing premiums due, as there are with other types of insurance. The seller pays a one-time premium for the new buyer’s Owner’s Policy based on the sales price of the property. California Title will search and examine the public land records to identify and eliminate any title risks. The new buyer’s Owner’s Policy indemnifies the buyer against loss and provides a defense in the event of claims against the title pursuant to the terms of the policy. For a one-time charge, the buyer’s Owner’s Policy protects the buyer for as long as the buyer owns the property.  With a Homeowners Policy, the buyer is protected even after they sell the property.
 
The buyer will be responsible for paying the title insurance premium for the lender’s policy on their home loan. The premium is calculated based on the loan amount, not the sales price of the property. Because the seller is providing an Owner’s Policy, California Title can give a concurrent rate which results in a significant savings on the Lender’s Policy. Title insurance gives the buyer, seller and lender peace of mind by protecting the security of the home and the safety of the investment.

This information is deemed reliable, but not guaranteed.