Minneapolis Lender's Title Insurance
Lender title insurance FAQs
As a lender, you want to make sure your investment is covered in every real estate transaction. Learn about our lender's title insurance through our lender title insurance FAQs below, or contact us with your specific questions.
What is lender’s title insurance?
It is possible that the owner might obtain a mortgage loan against the property owned by him. Now the funds of the lender are involved. The lender might insist on a policy known as lender’s title insurance to protect the lender's right against any claim on the title to the property. The lender’s right is restricted to the amount lent and not over the entire value of the property.
What rights are available to the lender under the lender’s title insurance policy?
The lender has many rights under a title insurance policy. A constitutional body known as the American Land Title Association (ALTA) frames these rules. The norms laid down by ALTA are applicable throughout the U.S. It covers the lender for any losses that may occur on account of the following situations:
a) The title of the property under mortgage may not rest with the mortgagor.
b) Titles under a prior lien or include some defects that may have existed in the title prior to creation of the mortgage.
c) Property that becomes unmarketable.
d) Land that has lost the right to access.
e) Mortgages that become unenforceable.
However, the lender should note that his or her claim is restricted to the maximum value of the loan plus any accrued interest and not over the entire property value. The owner’s title insurance policy covers the value of the entire property.
How does my lender's title insurance mitigate losses in title corrections?
The lender’s insurance premium is used to finance the costs involved in correcting the title of the property by conducting a search in the land records office. This can help in establishing how the property changed hands prior to reaching the hands of the lender. In case the title of the property is proved to be defective, it is the title insurance company that pays the insured amount. If the title is clear, there is no loss at all.
What will be the effect of any subsequent mortgage?
Any subsequent mortgage will have no effect on the first mortgage holder. In case the title gets disputed or the property is sold, the payments of the first mortgagor are adjusted first and the balance if any goes to the second mortgagor.
Why is the search of the land records done after the transaction of sale is over?
This is because the land records are not perfectly documented and a property buyer might not have access to these records before buying the property. By taking an insurance policy, the owner hedges the risk and transfers it to the title insurance company. The insurance company conducts the property search in order to protect the lender.
What are the benefits of lender’s title insurance?
The main benefit is that the lender’s money is insured against any claim arising on the property by a third person. Make sure your title insurance is properly calculated by filling out our title insurance calculator.
In which countries are such policies available?
In addition to the U.S., this policy is available in countries like Australia, China and Japan, and throughout Europe, Mexico and Korea. You can calculate your title insurance from anywhere; especially if you are in the U.S. in the beautiful city of Minneapolis or anywhere else in MN.