Common Title Problems and How To Avoid Them!
We interviewed VUE titles General Counsel, Ted Disabato, to learn about common legal issues that come up during the closing process.
VUE title companies Ted Disabato has been a practicing attorney for over many year and has been practicing in the title industry and real estate industry for over a decade. You can find him at our St. Louis office. There are many players involved in the title closing process, and the General Counsel plays a crucial role.
What does an attorney do for a title company?
As Counsel for VUE TITLE, Ted makes decisions on everything from insurability of transactions to underwriting issues that arise. These issues can include things like probate issues, foreclosures, survey issues, which endorsements are acceptable, properties held by companies, trusts, divorces, whether a power of attorney is valid, etc.
Julie works with Continental Title’s production and escrow departments to determine creative solutions to get deals to the closing table. Having a legal expert is crucial to the title and escrow process.
What are the most common calls attorneys get for title related problems?
Title Issue 1: Estate Issues
Estate issues mean someone has passed away while owning the home. There can be issues relating to heirs, probate estates, and even marital issues if the home was not left to the spouse explicitly. We will cover this in detail in a future blog, as it is something we get questions about frequently.
Title Issue 2: Divorce
If a couple who is in the midst of a divorce has not clearly defined how they are dividing their joint assets, that can slow down the closing process. Many couples do decide how they are dividing assets prior to selling, usually by an agreement or Court order. It can beneficial to have an agreement filed with the Court prior to the closing as to how the sale of the marital property will handled.
Title Issue 3: Bankruptcy
If a home being sold or refinanced and the homeowner is in Bankruptcy, it is imperative that that the client let the title company know as soon as possible. In most cases the title company will require that the Court approve the transaction. This is a time consuming process and can delay closing.
How can you prevent these title problems before they happen?
The best way to solve the above issues — especially with estate issues — would be to order a letter report before the property goes on the market. A letter report by a title company is a report as to the condition of the title ownership on a specific date.
By requesting a letter report in advance, the parties (both sellers and buyers) can clear up any issues beforehand.
Why is it important to know if a closing is in forbearance?
Mortgage forbearance is when your mortgage servicer or lender allows you to pause or reduce your payments for a limited period of time. Forbearance does not erase what is owed. If a mortgage or loan is in forbearance, it is still accruing interest and fees.
According to Julie, it’s important to let your title company know if a closing is in forbearance in order to obtain a correct payoff on the loan.
Home Buying Legal Advice
One important issue that many buyers are not aware of is vesting.
There are different ways to hold a title if you are buying as a married couple, as single people, etc. For example, in Missouri, a husband and wife will hold the title as “tenants by the entirety.” This essentially means they are looked at as one entity, and when one spouse passes away, the other automatically holds the title in total. There are other benefits afforded as well, but that’s for another blog.
Avoid Home Buying Legal Issues By Choosing VUE TITLE Company
VUE Title will ask questions that relate to the issues above prior to closing — so we have your back!