When placing an order request for the title on your purchase or refinance transaction, NewCastle will request several documents from the title company as a part of our title services. We request the same title documents for a purchase and refinance transaction. Title services are something you can shop for; you have the right to choose a title provider! When shopping for a title and settlement provider, make sure you compare premiums, discounts, settlement fees, and services.
Closing Protection Letter:
- Also known as CPL, the Closing Protection Letter is a letter issued by the title companies underwriter that forms a contract between the insurance underwriter and a lender in which the title company agrees to compensate for any harm or actual loss that the closer of the title company may have incurred. The CPL will have the lenders mortgagee clause, exact loan amount, loan number, borrower’s name, property address, closing agent, and closing location address.
- The title company will reimburse the lender if the title company failed to comply with the written closing instructions or if the closing agent handled the closing with any misconduct such as fraud, negligence, or being dishonest when handling the closing.
- A title insurance commitment is a document that is prepared after the title search that lists the known and existing defects. It is used at your closing to insure your property if certain conditions are met. Generally, defects that cannot be cured are excluded from coverage. It is prudent to review the commitment thoroughly with a title insurance professional, attorney or your lender before you close on your property.
- No Liens, encumbrances, or any adverse covenant or condition can be on the final policy. The commitment must include your lender as proposed insured, the loan amount must match the mortgage commitment, 24-month chain of title, correct vesting including the manner in which title is held, legal description of your property and the Accessor’s Parcel ID.
- Updating your title commitment throughout the process is common. At minimum it will be updated once. If your loan amount changes, the commitment will have to be updated to match.
- The effective date of the title commitment is the date shown in Schedule A. If you are purchasing your home, it is the date at which you legally become the owner of the property. If the requirements of the condition are not met in a 6 month time frame, the title companies obligation that are written on the commitment will expire.
- Also known as the ALTA or the Settlement Statement, the Title Invoice is an itemized list of fees for services that have been charged to the buyer and seller (if applicable). This documents is the title company fees invoice. NewCastle will match the fees in our system that are itemized on the invoice.
- In this section of the closing costs, there is a 10% Cumulative Tolerance Cure, for refinances. If the invoice for the title fees comes in higher than what we initially disclosed, we will need to credit the borrower back the sum of 10% of title fees on the Closing Disclosure.
- If you are purchasing a home and your spouse is not on the mortgage for whatever reason and they are going on title that is known as “Non- Borrowing Spouse” (NBS), they can’t be on the title invoice since they are not on the mortgage.
- Title wire instructions must include the closing agents name, and the bank account must be in the closing agents name. The bank's name, address, bank account number, and the ABA/routing number must be on the wire instructions.
- Beware of Cyber-crime! The wire instructions are rarely sent via email to prevent wire fraud. Hackers acting as the closing agent company and sending altered wire instructions to the borrowers has become increasingly common. The scheme would play out like this: the wire instructions would be altered and the borrowers would unknowingly wire funds to the hackers and not the title company. Result? The borrowers would be out that money. Lenders are hyper aware of this old scheme and will not accept wire instructions via email - only by fax. If you receive an e-mail or any other communication that appears to be generated from the title company and it appears to be altered, please call your lender or the title company to confirm accuracy. Most title companies don’t send wire instructions to emails anymore!
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