Title

What is Title?

Title is the rights of the ownership of real estate recognized and

protected by the law and the rights to posses, occupy, use,
control enjoy and dispose of the real estate.
 Profile
• Whenever a person says "applicant" wants Loan. He needs to
approach the Bank then the Bank or Lending company should
have to verify the Background of the applicant and the
property which he applied for.
• So the Lender will pass the work to other Private
companies to verify the property records.
• The Company will verify the Encumbrance of the Property
Records and the Judgments & Liens filed on the person's
Name.
• Later the abstracting company will prepare the Title Report
and send it back to the Lender
 Process Workflow

Borrow
er

Lender/
Bank

Escrow Vendor
Company
 Title Insurance
Title insurance is an insurance policy that
protects residential or commercial property
owners and their lenders against losses
related to the property’s title or ownership.

It insures rights and interests to the

property to facilitate the smooth
transfer of ownership and to protect
you from future claims against the
property.
There are two types of title insurance policies:

 Owner's policy
 Lender’s policy
 Title Insurance Policies

Owner’s policy
• An Owners policy is title insurance policy that protects
purchasers of real estate against any future loss on
property and Owner's Policy protects the buyer should a
covered title problem arise.
 Lender’s policy

 It is a policy issued to protect the lending institution over the

life of the loan for the given loan amount.

Polic
y
PROPERTIES COVERED UNDER TITLE INSURANCE

Residential title insurance policy Commercial title insurance policy

Insure insure
 House  Office building
 Condominiums  Industrial building

 Cottages  Shopping centers

 Vacant land  Vacant commercial land

 Leased properties  Leased commercial

 Rural properties properties

 Warehouse
 WHAT DOES TITLE INSURANCE COVER?

 Unknown title defects (title issues that prevent from having

clear ownership of the property)
 Existing liens against the property’s title (e.g. the previous
owner had unpaid debts from utilities, mortgages, property
taxes or condominium charges secured against the
property)
 Encroachment issues (e.g. a structure on your property
needs to be removed because it is on your neighbour's
property)
 Title fraud
 Errors in surveys and public records; and other title‐
related issues that can affect your ability to sell, mortgage,
or lease your property in the future.
 WHAT DOES TITLE INSURANCE NOT COVER?

 Known title defects (that were intimate to you before you

purchased your property);
 Environmental hazards (ex. soil contamination)
 Problems that would only be discovered by a new survey or
inspection of your property (e.g. the property is smaller than
originally thought);
 Matters that are not listed in public records (e.g.
unrecorded liens and encroachments); and zoning bylaw
violations from changes, renovations or additions to your
property or land that you are responsible for creating.
 Any losses or damages due to non‐title related issues.
What is a Title Search?

A detailed examination of the public records

concerning a property.

These records include: Deed, Court records,

Mortgage, property and name index, and
other public documents.
The purpose of the search is to verify the seller’s
right to transfer ownership
 Who is an Abstractor?

An abstractor of title is a person who prepares and certifies

the condensed history of the ownership of a particular
parcel of real estate
 Public Records
The records related to property and individuals maintained by the
government which are open for public and can be researched by
anybody from the public are called as Public Records.
The public records are maintained to establish and protect
certain rights or obligations of the parties to those instruments.
Sources of Information for Public Records:
• ASSESSOR/APPRAISER

• AUDITOR / TAX COLLECTOR

• COUNTY RECORDERS / CLERK OFFICE

• GIS – GEOGRAPHICAL INFORMATION SYSTEMS

• COURT – CIVIL & PROBATE COURTS

 Assessor/Appraiser

The Assessor's Department is responsible to update any

changes to the current assessment Value or Current Market
Value that is used for the calculation of property taxes.

Each time a parcel of property is sold or divided or a new

plat is filed, the transaction is shown and would be updated on
their systems.

We can get a Property card along with lists of

 Ownership
 Legal and building descriptions
 Parcel Id
 Location Address
 The assessed valuation for all property within county
 Auditor/Tax Collector

The Auditor's Department is responsible to update

and to calculate the Property Taxes every year.
These taxes will be calculated according to the
Current Market Value which has been update by
the Assessor Department.

 Ownership
 Legal, Parcel Id and building descriptions

 Location Address

 Current Year Tax Information

 Recorders
 Recorder of deeds refers to the government office which
maintaining a record of real estate ownership and all real
estate document.

 Documents giving rights on the real property are regularly

recorded by the recorder of deed.

 Few Counties will allow the access to the recorded

documents, whereas we can perform our title searches
accordingly.
GIS – Geographical information System

 To captures the presents data that refers to location of the

property.
 The GIS will keep updating the Parcel Map online every year.
 In this link you can find the Parcel Map along with the
Property Information's
 Conveyance Documents

Conveyance documents are written legal documents which transfer title

from
one person to another person or entity to entity.
There are Two types of conveyance:
Voluntary Conveyance: It is a transfer/conveyance which is wilfully created by
the owner on the real property.
Ex: Grant Deed, Warranty Deed, Quitclaim Deed, Will, Lease, Escheat, etc.
Involuntary Conveyance: The Title is transferred to the new buyer without
the consent of the owner. Usually involuntary conveyance passes by the
operation of law.
Ex: Foreclosure Deed, Tax Deed, Eminent Domain.
 Conveyance Documents

Deed is a legal instrument by which title of property is transferred from one person to
another.
There are two parties involved:
Grantor – A person or entity transferring the
interest in real property.
Grantee – A person or entity receiving the
interest in real property.

Essential Elements of Full Va lue Deed

Conveyance between strangers
Deed to be recorded by Title Insurance
Company
Documentary Transfer Tax to be paid on the
value of the property.
on Full Value of the property conveyed.
 Legal Description

A legal description is a description of real estate that is sufficient to identify

it for legal purposes. When preparing a deed, it is important to use the
correct legal description. In most situations, the best practice is to use the
legal description from the most recent deed to the property.

Types of Legal Descriptions:

Legal descriptions are of four types:

 Metes and bounds

 Sectional Property
 Lot & subdivision
 Condominium
 Sectional Property
SECTIONAL PROPERTY
Sectional Property is based on Rectangular Survey
system. Sectional Property is property which described
using Quarter, Section, Township & Range.
 Lot & Subdivisions
LOT & SUBDIVISIONS:
 Property which is described by Lot, Block and Subdivision. The
developer will record a plat map showing how the land has been divided and each
subdivision must have a unique name. This is the easiest type of legal description
to read.

Example:
Lot 1 of Block 1 of Las Vegas Heights, according to the plat thereof, recorded in Book
10, Page 20 of Plats in Clark County, Nevada.
Essential words of Lot and Block legal description: Lot, Block, Subdivision, Plat Book
& Page.
 Condominium Legal
An apartment house, office building, or other multiple-unit complex, the
units of which are individually owned, each owner receiving a recordable
deed to the individual unit purchased, including the right to sell, mortgage,
etc., that unit and sharing in joint ownership of any common grounds,
passageways, etc.
 Common Types of Deed
Grant deed

 It is a legal instrument (Document) which transfers title of a real property to a new owner and is always
recorded at the county recorder’s office.

Warranty deed

 A warranty deed is a deed which warrants good and clear title to the real estate transferred.

Quit claim deed

 A quit claim deed is a legal document by which a grantor releases or quits interest of the property to
buyer
 It is most commonly used between spouses, within family transaction and in partnerships; it contains no
warranties.

Trustee’s Deed Upon Sale or Certificate of Title

 It is a deed which is received by the highest bidder at the Foreclosure.

 Mortgage

 An agreement that allows to borrow money from a bank or similar

Organization, especially in order to buy a house or for other purpose
by pledging the property.
 Parties involved in mortgage are Borrower and Lender.
 Parties in mortgage:
 Borrower: A person who hold the property and pledging the
property to Bank or other financing organization. He also
known as mortgagor.
 Lender: A bank or financing organization or individual person

who is lending money to borrower on property. Lender is also

known as mortagee.
 Types of mortgage
 Open-End mortgage: A mortgage that allows the borrower to
get extra amount for same mortgage after certain conditions
have been met.
 Closed-End mortgage: A mortgage that does not allows to

increase the money during payout. Loan amount was fixed

one.
 Balloon mortgage: A mortgage that allows borrower to make

interest payments over set of time period and repays full

amount at end.
 Associated Docs
 Assignment: Document that allows to transfer original lender
to another one.
 Modification: Document that allows to make change
 s in mortgage such as loan amount, mortgage maturity date
etc.
 Subordination: Document in which prior mortgage holder
agrees that it will be subordinate (junior) to a subsequently
recorded mortgage.
 Release/Satisfaction: Document which is filed by lender to
release the mortgage after borrower paid the full loan
amount.
 Notice of Default: A notice of default is a notification given to
a borrower stating that he or she has not made their
payments by the predetermined deadline, or is otherwise in
default on the mortgage contract.

 Lis Pendens: Document is filed by lender against borrower if

fails to respond Notice of Default.

 Final Judgment: Judgment file against the borrower after fails

to respond Lis Pendens within some time period.

 Certificate of Title: This is the final action in which lender seize

the property and sell to new buyer.
 Deed of Trust
 Deed of Trust(DOT) is same as mortgage but here borrower
pledges property to appointment of trustee. Trustee will hold
the property during time of loan.
 Parties in Deed of Trust
 Borrower (trustor )
 Lender
 Trustee

We already seen about Borrower and lender.

 Trustee:Person who is holding the property at the

time of loan period.
 DOT Associated Documents
 Assignment of DOT : The document used to transfer
original lender to another lender to transfer rights on Deed
of Trust.
 Substitution of Trustee: If a person appointed as trustee
fails to qualify or is unwilling or unable to serve or resigns
as trustee, the beneficiary may appoint a successor
trustee through Substitution of Trustee.
 Modification: Modification is a process where the term of
DOT gets modified.
 Release of DOT: Certificate from the lender stating that
the loan has been repaid.
 Notice of Default: A notice of default is a formal notification
from trustee that a borrower has failed to make payments
on an outstanding debt according to the terms and
conditions found in the contract between the borrower and
the lender.
 Notice of Rescission: A recorded notice to release a notice

of default of deed of trust.

 Notice of Trustee’s Sale: It is the notice issued by the

trustee if the trustor defaults to pay the payment due after

90 days of assurance of Notice of Default.
 Trustee’s Deed: Deed given by the trustee when property is

sold under the power of sale in a trust deed.

 Types of DOT
There are four types of Deed of Trust and they are:
 Purchase Money Deed of Trust
 Open ended Deed of Trust
 Fictitious Deed of Trust
 All inclusive Deed of Trust

Purchase Money DOT:

This deed secures payment for all or substantially on the complete
value of the real property
•Example: John has plans of buying a home or a building for $300
000 and if he gets a loan sanctioned for $300,000 then such a loan is know
as Purchase Money Deed of Trust.
 Open Ended Deed of Trust
An open‐ended trust deed involves a loan arrangement
whereby additional amounts of money may be lent in the future
without affecting the loan’s priority.
• Example: Jessica gets a Loan sanctioned for
$600,000 but she wouldn’t withdraw this amount
completely at once. She takes $200,000 initially,
$100,000 after 3 months and $200,000 after 6
months or depending on the requirement. As you
see here, the loan is taken in advances and the
interest is calculated for $500,000 and not against
$600,000 or in simple words it is just like your
Credit Card.
FictitiousDeed of Trust
A deed of trust recorded by a trustee that discloses all
the terms of the trust deed but does not relate to a specific
transaction and is used for reference only.

All Inclusive Deed of Trust (Wrap around)

An all-inclusive deed of trust (“AITD”) is used when the
seller will be financing part of the selling price, and the buyer
will also take subject to the existing deed of trust. The seller
remains on the existing loan (and continues to make the
payments) and finances the difference between the existing
loan balance and the purchase price.
 Jack owns a property worth $5,00,000
 He has 3 loan open on the property
 First loan for $1,00,000
 Second loan for $3,00,000
 Third loan for $50,000
 Total loans open are $4,50,000
 Jack intends to sell the property having loans open on the property
 Jill approaches Jack to buy the property
 Initially Jill makes a down payment of $50,000 to the seller, and agrees to
make the balance payment by executing a junior Deed of trust which
includes the previous open loans
 This junior DOT is called as All‐Inclusive Deed of Tr ust
Foreclosure
Judicial & Non-Judicial
 Foreclosure

Foreclosure is a legal process in which a lender attempts to recover the

balance of a loan from a borrower, who has stopped making payments
to the lender, by forcing the sale of the asset used as the collateral for
the loan.

There are Two types of foreclosure:

Judicial foreclosure

Foreclosure is the process where a home is sold to pay

off an unpaid debt. Usually foreclosures happen
when a homeowner falls behind in home loan
payments. In certain states, foreclosures are
always judicial,

Judicial foreclosures usually take longer than Non-Judicial.

 In a judicial foreclosure, the lender files a formal complaint with the
court and records a legal notice of “Lispensens”. The complaint must
state the details of the debt and the Lispensens gives public notice
that the house is the subject of foreclosure proceeding and
implements the mortgage foreclosure process

 After the Lispensens is entered, the borrower is typically given 30 days

to respond and satisfy the dept (plus penalties and foreclosure cost). If
they do not, the court will tender a judgment in favor of the lender,
instructing that home will be Sold at a “Sheriff’s sale” action.

 After the judgment is entered, the borrower is typically given 90 days

Prior to the sheriff’s sale to pay the entire amount owned and stop the
Foreclosure process.

 If the mortgage foreclosure process isn’t stopped, the property goes to

a
Sheriff’s sale and highest bidder will take over the property
 Borrower Default’s
the payment
towards the
Mortgage
Judicial Foreclosure

If owner pays back

The Lender file a the amount, Lis
formal complaint Pendens will be
with court and cancelled and
If Paid
records a legal notice foreclosure
of “Lis Pendens” proceeding will be
stopped
If Owner pays the
The court will tender a “ amount, Judgment
Final judgment of Mortgage If will be cancelled and
Foreclosure” in favor of the Paid
foreclosure
lender instruction that proceeding will be
home will be sold stopped

If not paid within the said date,

property will go for action and the
highest bidder will take over the
property
 Non-Judicial foreclosure:

 The Non-judicial process is made possible by legal document called a

Deed of Trust, which gives this third party trustee the right to sell the
home if you fail to make payments. Many Western state use deed of
trust
in creating home loans. This system avoids a judicial foreclosure and
speeds the foreclosure process. and Non-judicial without going through
the court system

 The borrower has fixed period time (which varies state by state) to
either sell the home, or negotiate to solve the financial problem.

 The foreclosure process isn’t stopped, the property goes to action

and
highest bidder will take over the property
 Borrower Default’s
the payment towards
the Deed of Trust
If owner pays back
the amount, Notice
Trustee sends the of Default will be
NON Judicial

Notice to the cancelled and

borrower If Paid foreclosure
“Notice of Default” proceeding will be
stopped
If Owner pays the
amount, Notice of
Trustee sends the notice trustee’s sale will be
If
cancelled and
to the borrower “ Notice Paid
foreclosure
of Trustee’s Sale
proceeding will be
stopped

Property will be sold to the highest

bidder in the auction and “Trustee's
Deed Upon sale will be recorded
 Judicial vs. Non-Judicial
Judicial Non-Judicial
Mortgage foreclosed by Deed of trust foreclosed
Judicial by Non-judicial

Judicial foreclosure Non-judicial foreclosure

Processed through the processed through the
court trustee
Lender is conveying Trustee is conveying
property to highest property to highest
bidder in auction. bidder in auction.
Final document is Final document is
“Certificate of title” “Trustee's Deed upon
Sale”
Time Consuming Quick Process
process
 Special type of foreclosure

Deed in Lieu:
 A deed in lieu of foreclosure is a deed instrument in which a

mortgagor (i.e. the borrower) conveys all interest in a real

property to the mortgagee (i.e. the lender) to satisfy a loan that is
in default and avoid foreclosure proceedings.
 Vesting

 Vesting is the status and in which title of ownership is held with fixed
determinable interest in a particular parcel of real property

Vesting = Right of Possession

The following are the different way of acquiring title

 Severalty or sole and separate property

 Co-Ownership
a) Joint tenancy
b) Tenancy in common
c) Tenants by Entirety
 Severalty or sole and separate property

Severalty or sole and separate property

It is the property which is owned prior to being married or

acquired after
marriage by gift, will, inheritance or by quit claim from the
spouse
 Joint Tenancy
TENANCY IN COMMON is an interest in real property that is owned by:

 Two or more persons

 May or may not have equal interests
 Created through different wills or transfers
 Having no “Rights of Survivorship” (No Will)
 And consent of other co‐owners is not required for any modification
to the individual interest in the property.
Let’s review an Example:

 Dave and Dan are brothers who

have joint tenancy in the building
where they operate their studio.
 Dave dies in an accident.
 Dan becomes sole owner of the

property due to the joint tenancy

they held.
 Tenancy in common
 TENANCY IN COMMON is an interest in real property that is
owned by:
 Two or more persons
 May or may not have equal interests

 Created through different wills or transfers

 Having no “Rights of Survivorship” (Create Will)
 And consent of other co‐owners is not required for any
modification to the individual interest in the property.
Let’s review an Example:

 John and Greg are tenants in

common who share equal
ownership in a piece of property.
 Greg dies at work.
 Greg’s will grants Bob, Bo and
Bill his share of the property.
 John now, owns half of the
property and Bob, Bo, and Bill
own the other half.
 Tenants by Entirety

Tenancy by the Entirety:

An estate that exists only between husband and wife with equal right of
possession and enjoyment during their lives and with the right of
survivorship.

Let’s Review an example

 Smith and Mary are married and

own a home.

 Mary dies in accident Wif

e

sband
Smith now owns the house. Hu
 Way to Acquire Title – Community Property
 The property which is acquired other than separate property during marriage or after
marriage by either a husband or wife, or both while residing in the community
property state is called COMMUNITY PROPERTY.
 Community property, also called marital property, is recognized in Arizona,
California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and
Wisconsin, but the laws vary from state to state.

Features of community property

 Each spouse owns one‐half of the property, but neither spouse may enter into any form
of agreement to buy, sell, or mortgage the property without the other spouse consent.
 The community property is divided equally in case of divorce and is deemed to be
owned by husband and wife as tenants in common.
 If one spouse dies leaving a will, his or her share of the community property will go to
the persons named in the will. If there is no will the law varies from state to state on the
succession to such property.
 Lien

Li en :

An encum brance against propert y for

m oney, eit her volunt ary or involunt ary. i. e.
j udgm ent s, m ort gage, t axes.
 Types of Liens:
 Mechanic lien
 State Tax lien
 Federal Tax lien
 Child Support lien
 Code Enforcement lien
 Homeowners association lien
 Condominium association lien
Mechanic lien: A claim entered by the material man
for labor or material furnished in the construction or
repair of the structure.
State Tax lien: A lien attaching to property for

nonpayment of state income tax.

 Federal Tax lien: A lien attaching to property for
nonpayment of a federal tax (estate, income, etc.).
 Child Support lien: A lien files on the owner for
nonpayment of child support judgment.
 Homeowners Association Lien(HOA):
HOA assessment lien is a lien on a
homeowner's property if he or she becomes delinquent in
paying the monthly fees and/or any special assessments.
 Code Enforcement lien:

Lien filed for violating codes or rules of the city

or municipal. Example: Growing grass over some limit, not
clearing debris for time period, etc.
 Condominium association lien:

A claim entered by the condominium

association for the unpaid assessment charges for the
maintenance charges.
 Judgment

Judgments:

A decision of court of law, Money

j u d g m e n t s , when recorded becom e a lien on t he real
propert y of t he defendant .

Types of Judgments:
Civil Judgment
Criminal Judgment
 Civil Judgment:
Civil lawsuits are legal disputes between two
private individuals, which include contract disputes, divorce
cases, real estate disputes amongst others. This type of
judgment may affect the real property.
 Criminal Judgment:
Judgment which files against individuals for
some misbehave actions are criminal judgments. This type
of judgment wont affect real property.
 Other Documents

 Lease Agreement:
A contract between a lessor and lessee
that allows the lessee rights to the use of a property
owned or managed by the lessor for a period of time.
Power of Attorney:

Power of Attorney is a written document

signed by a person giving another person the power to
act in conducting the signer's business, including signing
papers, checks, title documents, contracts, handling bank
accounts and other activities in the name of the person
granting the power.
 Easement:
An Easement provides one party the right to use
the land of another party for a specified purpose.
Covenant Conditions & Restrictions (CC&R’s)

CC&R’s are private agreements/limitations placed

upon real property which restrict or limit the use of the property
in some manner.
Ex: limiting the height of a building; limiting the
number of buildings which can be built upon a specific area of
land.
Financing Statement(UCC):
A document filed in the public records; gives
notice that a secured party claims a security interest in certain
described goods and other personal property owned by a
named debtor. It is filed under the Uniform Commercial Code.
 Will:
A person who makes a will is called a
testator. Wills are made during the life of the testator and
provides for the disposition of his property upon his death.
Wills take effect only upon the death of the testator.

Probate

The process of proving a will is valid

and thereafter administering the estate of a dead person
according to the terms of the will.
Inheritance

If a person dies without leaving a will

he is said to have died "inestate" and his property
passes to his heirs according to the laws of descent
and distribution. In other words, his heirs inherit his
property by operation of law, in some state the
process is called as escheat.
 Hom est ead Exem pt ion:
A homestead exemption provides relief
from property taxes by exempting all or a portion of the
valuation of the homestead from taxation. The counties
and other governmental subdivisions are reimbursed by
the State for the tax lost due to homesteads exemption.
Who can file for Hom estead Exem ption?

 Homestead exemption is available to three groups of

people in general.
 Persons over the age of 65.
 Certain Disabled individuals.
 Certain Disabled Veterans and their widow(er)s.
 Bankruptcy:
Bankruptcy is a legally declared inability of an
individual or organization to pay their creditors. bankruptcy is
imposed by a court order, often initiated by the debtor.
 Plat Map:
A plat is an officially drawn map of a land area
that defines the boundaries between different parcels of
property to scale.
 Search Types

 Current Owner Search:

Search performed on current owner of specific
property upto warranty deed occurs. The report contains real
estate records such as deed, mortgage, lien, judgments and
tax information.
 Two Owner Search:

Search performed on current owner and prior

owner of specific property upto two warranty deed occurs.
 Full Search:
Search performed upto certain period (30 to
60 years) according to client requirements. The report
contains all deeds including prior owner deeds, all open
mortgages, liens, judgments etc.
 Update Search:

Search performed within certain time period

for specific property.
 Effective Date:
Effective date is search covered date which is
take from recorded site when last verified record uploaded.
Normally we are using 7 days back from current date.
 Documents Merging Format:
 Assessor
 Tax
 Deed (Current to old)
 Mortgage\Dot (Old to Current )
 Mortgage\DOT associated documents.
 Liens
 Judgments
 CCNR
 Easements
 Plat Map
Chain Sheet