Questions that Need Answers

What is a HUD-I Settlement Statement?

The HUD-I Settlement Statement is the document prepared by the title company at closing which shows where all of the money in the transaction is coming from and going to. It gives a 'financial picture' of the closing transaction. At closing, the title company is responsible for preparing the HUD-I Settlement Statement in accordance with the contract, lender's instructions, market practice and state and federal laws. Every closing should have a HUD-1.

What should I know about title insurance?

Most home sellers and buyers have been informed that obtaining title insurance will provide them necessary protection over possible title defects, but many remain uncertain why this is so. You buy car insurance to protect yourself, not because you think you are going to be in an accident. Title insurance is there to protect your most important investment.

What is owner's title insurance?

Owner's title insurance provides you with protection against the loss of your home caused by someone in the future finding a problem with the title.

Why does the buyer need title insurance?

Even the best title search, performed by the most experienced and capable experts, cannot ensure that no title hazards exist. Some problems just aren't revealed in public records. Years ago, there may have been an honest mistake in determining the status of title. Or today, a previously unknown heir may come forward to claim ownership or a deceased relative's property. To help protect you in these events, First Tipton Title can issue you an owner's title policy. This will insure you against most of these unforeseen problems. We not only help to remove the flaws that show, we also insure against those that may not show.

What if I don't have owner's title insurance?

If a problem with your title occurs and you don't have owner's title insurance, you could lose everything you've invested in your home or face expensive legal costs. No one wants someone else living in their home after they have paid the mortgage.

What risks call for title insurance protection?

Real estate has such great value and is so basic a form of wealth that many special laws have been enacted for its protection. As a result, the owner of land has exceedingly strong rights and so do the family and heirs of the owner.

However, others may have "rights" in the property as well. There are mortgage and leaseholder rights; liens due to unpaid taxes; lien claims to those whom the owner owes money; mining, oil or air rights, and many others. Anyone who has such a claim is, in a limited way, a part owner. He or she cannot ordinarily be deprived of their interest except by having the claim settled or released. As a new owner, you may know nothing about these risks, but you are still vulnerable to such claims on your property.

My lender has a mortgage title insurance policy on my property. Isn't that enough?

No, it is not enough. If there is a complete failure of title, you have no protection and could lose both your property and equity in the property.

A mortgage title insurance policy protects only the lender's interest in the property, not the current owner's. First Tipton Title provides owners' title insurance policies; to protect the owner's interest in a piece of property should a claim arise. Purchasing an owner's title insurance policy at the same time that the lender orders the mortgage title insurance policy can result in a huge savings.

Is title insurance expensive?

The cost of title insurance on any piece of property is very small when compared with the benefit and security it gives. And, there are no annual payments to keep the policy in force. The original premium is your only cost as long as you or your heirs own the property.

How can there be a title defect if the title has been searched and a loan policy issued?

Title insurance is issued after a careful examination of copies of the public records. But even the most thorough search cannot absolutely assure that no title hazards are present, despite the knowledge and experience of professional title examiners. In addition to matters shown by public records, other title problems may exist that cannot be disclosed in a search.

Doesn't the seller's deed take care of giving me clear title?

No! Not at all. A "deed" is merely an instrument whereby a seller transfers his or her right of ownership, whatever it may be, to you. It is not proof that the person described as the seller is actually the owner. It does not do away with claims or rights others may have in the property. From the deed, you cannot determine for certain what rights, liens or claims may be outstanding against your title.

What is Predatory Lending, and how can I protect myself from loan fraud?

According to HUD, people across America lose their homes and their investments because of predatory lenders, appraisers, mortgage brokers and home improvement contractors who:

Sell properties for much more than they are worth using false appraisals.

Encourage borrowers to lie about their income, expenses, or cash available for down payments in order to get a loan.

Knowingly lend more money than a borrower can afford to repay.
Charge high interest rates to borrowers based on their race or national origin and not on their credit history.

Charge fees for unnecessary or nonexistent products and services.

Pressure borrowers to accept higher-risk loans such as balloon loans, interest only payments, and steep pre-payment penalties.

Target vulnerable borrowers to cash-out refinances offers when they know borrowers are in need of cash due to medical, unemployment or debt problems.

"Strip" a homeowner's equity from by convincing them to refinance again and again when there is no benefit to the borrower.

Use high pressure sales tactics to sell home improvements and then finance them at high interest rates.