Title Company

A company that examines and verifies titles to real estate and also may issue title insurance. 
   

The title company typically handles the legal matters involved in buying and selling property.  This will consist of:

• Ordering an abstract of title
• Checking the abstract once received
• Preparing a title opinion report or title commitment for the lender
• Preparing the various documents that will need to be signed at the closing. 

The title company works for the lender, or the purchaser if a lender is not involved, and is paid at closing by the purchaser.  A title company will  issue what is know as a “title policy” to the lender.  This is an insurance contract, which insures the lender, that if there are defects in the title to the property, the insurance company will pay to either correct the problems, or pay for any loss the lender suffers as a result of the defects.   Unlike most other forms of insurance, title insurance protects the policyholder against an event or act that has already occurred, rather than one that may occur in the future.  A title insurance policy is normally personal to the insured and is not assignable nor does it run with the land. 

There are two types of title policies, a lenders policy, which protects the lender, and an owners policy, which protects the owner.  In Louisiana, the custom is that the purchaser pays for the lenders policy as a condition of the loan, and is offered at closing the option to obtain the owners policy.  In other states, the custom may be different, such that the seller may provide the purchaser with a policy of owners title insurance as a condition of the sale. 
        The title company will obtain instructions from the lender, and must perform the closing according to the lender's instructions.  The title company will also obtain or request payoff statements and other documents related to prior mortgages and liens on the property.

Related Links

• Title Insurance