|Top 10 Reasons to Check Your Property Title Search
The real estate market of recent years has caused millions of documents to be recorded on property titles. This volume has increased the number of errors, and opened loopholes for document fraud. Because of this, in addition to the more common needs of a title search from property investors, mortgage brokers, property insurance claims agents and government agencies more homeowners are running annual title searches on their homes in addition to running annual credit checks. Mistakes, mis-indexing, title errors are revealing themselves at a much more frequent rate.
When clients check the title search on a property, they are often surprised to find old liens, incorrect ownership, missing assignments and even mortgages taken out without the owner’s knowledge.
1. Unreleased mortgages & Missing assignments
Even though the financial account for a prior refinanced mortgage may be paid off, the lender also has to file a lien release with the county records office to remove the old mortgage from your property title. Proper assignment chains are crucial in determining current ownership rights. Additionally, Some lenders have used a "nominee trustee" process to transfer mortgage ownership outside of the official land records system. Title searches verify if proper chain of assignments have been recorded in the official land records. The extreme volume of mortgage refinance activity over the past 5 years has resulted in lenders becoming less careful in filing these documents.
2. Incorrect liens
Even though the financial account for a prior refinanced mortgage may be paid off, the lender also has to file a lien release with the county records office to remove the old mortgage from your property title. The extreme volume of mortgage refinance activity over the past 5 years has resulted in lenders becoming less careful in filing these documents.
3. Property vesting - family events
A title search will show the current ownership structure, if it is owned individually, jointly, as tenants-in-common, tenants by entireties, or even as a corporation. A death in the family, or divorce are also reasons to verify title search records.
4. Document fraud
Increasingly, criminals are using property records fraud to commit financial crimes, and identity theft, without notice to the property owner.
5. Prior owners records
The gap between the contract and closing dates allows a loophole where liens or mortgages from a prior owner may not be cleared from property records.
6. Assessed value
The counties assessed value may not represent the true taxable value of property in today's changing market, resulting in an inflated tax bill.
7. Deed copy
A title search will provide a stamped recorded copy of the property deed, which can be valuable as proof of ownership, or residency.
8. Other party mortgages
By using loopholes in the recording system, third parties can take out a mortgage against one property and have it recorded against another property, resulting in a lien on the title.
9. Pre-purchase research
The title search shows the original purchase price and date of the current owner, listing mortgages and liens. The buyer knows the sellers current financial situation before making an offer.
10. After sale verification
After purchasing a property, the title search is checked, to verify that the correct names are on the title, and that all records are recorded properly.