The Origination of Title Insurance and What is a Title Search
INDUSTRY INSIGHT
TITLE INSURANCE
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Blue Sky Closing Services, Inc.
The Origination of Title Insurance and What is a Title Search
Believe it or not, title insurance— which is predominantly a U. S. product— originated in Philadelphia, Pennsylvania! In an 1868 Supreme Court case, Watson v. Muirhead, a buyer lost his property due to a missed lien, and the first-ever title insurance company was founded to protect future owners.
In 1929, the American Land Title Association was formed, and the first standardized policy became a staple in the mortgage industry. However, it was not until after WWII, when servicemen returned and started to purchase properties in large numbers, that the industry matured into what we know today. Additionally, the Real Estate Settlement Procedures Act of 1974 formalized the role of title companies to protect consumers and require transparency in the closing process.
Title insurance( like all insurance) is a risk-management tool. It protects consumers( homeowners) from rare but potentially financially catastrophic losses and / or ownership disputes. Unlike homeowner’ s insurance, which covers future damage and is paid on a yearly basis, title insurance protects against issues that occurred in the past but have not been discovered yet.
The premium that the consumer pays for an Owner’ s Title Insurance Policy is one-time, non-recurring and collected at the purchase closing. The policy is good for the lifetime that the purchaser owns the home. It covers legal defense from claims arising out of forgery, undisclosed heirs, mortgages, judgments, taxes, boundary line disputes and more.
How does a title company know the history of a home and where potential defects lie? We order a title search! A title search is a detailed examination of public records to verify ownership and identify issues before a real estate transaction.
A title search is completed by seasoned professionals who know how to navigate the recorded documents housed in a county office. The search reports many documents including historical deeds to identify prior owners and their interests, mortgages and satisfactions taken over many years, unpaid taxes that were turned over to tax claim bureaus, judgments and potential claims against prior owners that need to be satisfied, plan details and legal descriptions of the property being conveyed, etc.
A report is ordered not by a property address, but rather by a tax parcel number, or in Allegheny County, a block and lot number. The completed report is then examined by title underwriters( like your friends at Blue Sky Closing Services, Inc.) to determine the conditions / requirements necessary to satisfy in order to transfer free and clear title.
In the case of a standard, residential transaction between two non-related individuals, Blue Sky typically sees and satisfies tenancy questions, open mortgages and, at times, delinquent taxes or judgments. We also check child
support, bankruptcy cases and federal terrorist watch lists. We confirm that historical Estates have paid their inheritance tax and divorces have split proceeds according to their settlement agreements, among other matters.
There are many potential matters that can become future liens on title, so your preferred title company should be experienced enough to foresee these issues and stop them in their tracks.
In certain situations, however, issues revealed on a title search are so severe that they cannot be cleared and the contract for real estate ends in termination. It’ s usually a federal tax lien whose payoff is more than the sales price, undisclosed by the seller before listing, or a mortgage in foreclosure. In rare cases, it can be a landlocked property with no access to a main road or a laundry list of outstanding heirs to an Estate that need to be notified by quiet title before a property can be insurable.
If you make it to the closing table with a reputable title company, you can trust that the title is clean and that you are insured with a leader in the industry.
Blue Sky Closing Services, Inc. is a proud agent of Fidelity National Title Insurance Company and First American Title Insurance.“ Blue Sky” means no clouds on title..
2940 South Park Road, Bethel Park, PA 15102 blueskycsi. com 412.595.7263
Katie McGurk Mannarino is the V. President of Blue Sky Closing Services, Inc. She has closed thousands of residential and commercial real estate transactions over 30 years and is a trusted member of the real estate community. Ask your realtor about Blue Sky Closing Services, Inc.
John Barley, Coldwell Banker Jeff Selvoski, EXP Realty
Alyssa Costantino, Howard Hanna
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