What a Dishonest Title and Escrow Company Won’t Tell You

What a Dishonest Title and Escrow Company

Watch out for these red flags when seeking title insurance

Most aren’t willing to bargain for dishonesty. When it comes to the largest transaction you’ll make in your entire life, it would be wise to read the fine details.

How do you know you can trust your title and escrow company? Take a good look at the transparency of the title company and each measure taken to self-audit and secure the underwriting process. A dishonest settlement agent or escrow company fails to mention a few important things.

What does a dishonest title or escrow company not tell you?

About those hidden fees tacked onto the “low price”.

You should always look twice when the price is too good to be true. Most title companies operate within a reasonable price range, and not many can actually lower the cost dramatically. If a title agent promises the lowest price possible, take a good look at the attention to detail or research on the chain of title that may be lacking in the title insurance costs. If you plan to buy a home, it’s important that you know exactly what you’re getting when you pay for title insurance. It might not be a good idea to grab the “lowest price” when the title insurance agent fails to report issues with the title.

They failed to remit funds to pay off seller’s mortgage.

Are your funds safe and secure? One of the biggest issues with title insurance and escrow companies these days is data and computer systems security. You want to be absolutely certain that your funds are safely stored and ready for release on the appropriate date. This goes for all parties involved. A title insurance company must transfer funds to cover the cost of the seller’s mortgage and close this out before the home buyer is issued a mortgage for the home.

There were unpaid real estate taxes on the property.

During the process of holding a home, there may be property taxes accrued. If a property is bought following a foreclosure, on the market for an extended period, or granted as the product of a will, then the duration of time it’s held before being bought may be long enough to owe property taxes. If this happens, the title insurance company or institution in possession of the deed is responsible for paying these taxes, but oftentimes, the title is transferred only for the home buyer to find they now owe back taxes!

The underwriter failed to research before issuing the title.

Does your title insurance underwriter provide specific documents to outline the chain of property? Be certain that your title insurance agent reviews the entirety of documents and records pertaining to the property. This is how easements slip through the cracks. Some title insurance companies will list “any and all documents of record” and “any and all easements of record” on the exceptions page instead of attaching the actual documents covering the property. This method relies on the home buyer attempting their own research.

The agent failed to record the home buyer’s deed.

This is title insurance negligence at its finest. You bought the home and were issued title insurance. Now, you have no idea that your name is not actually on the records. There was no follow through, and you don’t actually own your home from a legal perspective.

Who wants a mess instead of title insurance?

You need a title and escrow company you can trust. The real estate legal and mortgage lending experts at Bay National Title Company are at your service. Please fill out the contact form or give us a call to speak with a representative.

SOURCES:

Questions to ask when selecting a title company

Title companies responsible if agents are dishonest