- Including Short Form Loan Policies
Why are there separate title policies for owners and lenders?
There are two types of title insurance: owner’s title insurance, called an Owner’s Policy, and lender’s title insurance, called a Loan Policy. Most lenders require a Loan Policy when they issue you a loan. The Loan Policy is usually based on the dollar amount of your loan. It only protects the lender’s interests in the property should a problem with the title arise. It does not protect the buyer. The policy amount decreases as you pay down your loan and eventually disappears as the loan is paid off.
An Owner’s Policy is usually issued in the amount of the real estate purchase. It is purchased for a one-time fee at closing and lasts for as long as you have an interest in the property. Only an Owner’s Policy protects the buyer should a covered title problem arise. Possible hidden title problems can include:
- Errors or omissions in deeds
- Mistakes in examining records
- Forgery
- Undisclosed heirs
An Owner’s Policy provides assurance that your title insurance company will stand behind you—monetarily and with legal defense if needed—if a covered title problem arises after you buy your home.
Attention to detail, rigorous training, and strong business ethics are all essential to title insurance and closing services. At First American Title Company of South Dakota, our staff takes the time to give proper attention to each and every transaction we handle. These principles are just as important to our team as to our clients, meaning we deliver exceptional service time and time again. For comprehensive title and escrow/closing services in the state of South Dakota, First American Title Company of South Dakota is your trusted partner.
First American Title Company is proud to offer the following services:
- Title Insurance
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- Owner’s Policy/Lender’s Policy (expand)
There are two types of title insurance: owner’s title insurance, called an Owner’s Policy, and lender’s title insurance, called a Loan Policy. Most lenders require a Loan Policy when they issue you a loan. The Loan Policy is usually based on the dollar amount of your loan. It only protects the lender’s interests in the property should a problem with the title arise. It does not protect the buyer. The policy amount decreases as you pay down your loan and eventually disappears as the loan is paid off.
An Owner’s Policy is usually issued in the amount of the real estate purchase. It is purchased for a one-time fee at closing and lasts for as long as you have an interest in the property. Only an Owner’s Policy protects the buyer should a covered title problem arise. Possible hidden title problems can include:
- Errors or omissions in deeds
- Mistakes in examining records
- Forgery
- Undisclosed heirs
An Owner’s Policy provides assurance that your title insurance company will stand behind you—monetarily and with legal defense if needed—if a covered title problem arises after you buy your home.
- Construction Loan Policies(expand)
Why do I need title insurance for a newly built home?
Construction of a new home has the potential exposure to unique title pitfalls that may impact the lender and owner.
You may think you are the first property owner when you are constructing or buying a newly built home. However, there were most likely many prior owners of the unimproved land. A title search will uncover any existing liens and a survey will determine the boundaries of the property you’re purchasing.
In addition, a builder may have failed to pay subcontractors and suppliers. This could result in the subcontractor or supplier placing a lien on your property.
Since your lender wants to be sure the property has clear title, they will require that a Loan Policy of Title Insurance be purchased. But a Loan Policy only protects the lender. By purchasing an Owner’s Policy of Title Insurance, you will be protected from covered threats to your title and ownership that went undiscovered at the time of closing.
Best of all, your Owner’s Policy provides this coverage for as long as you own your home!
- Owner’s Policy/Lender’s Policy (expand)
- Leasehold Policy
- Easement Policies
- U.S. Policies
- Title Insurance Fee Schedule
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- Property Reports
- Owners and Encumbrance Report
- Closing Services
70+ Ways to Lose Your Property (expand)
You don’t want problems from prior ownerships to interfere with your rights to your property. And you don’t want to pay the potentially ruinous cost of defending your property rights in court.
A title insurance policy is your best protection against potential title defects, which can remain hidden despite the most thorough search of public records and the most careful escrow or closing.
For a one-time premium First American agrees to reimburse you for loss due to defects existing prior to the issue date of your policy, up to the policy amount. And, should it be needed, the policy also provides for the cost of legal defense of your title.The standard coverage policy protects you against such potential defects as:
- Forged deeds, mortgages, satisfactions, or releases
- Deed by person who is insane or mentally incompetent
- Deed by minor (may be disavowed)
- Deed from corporation, unauthorized under corporate by-laws or given under falsified corporate resolution
- Deed from partnership, unauthorized under partnership agreement
- Deed from purported trustee, unauthorized under trust agreement
- Deed to or from a “corporation” before incorporation, or after loss of corporate charter
- Deed from a legal nonentity (styled, for example, as a church, charity, or club)
- Deed by person in a foreign country, vulnerable to challenge as incompetent, unauthorized, or defective under foreign laws
- Claims resulting from use of “alias” or fictitious name style by a predecessor in title
- Deed challenged as being given under fraud, undue influence, or duress
- Deed following nonjudicial foreclosure, where required procedure was not followed
- Deed affecting land in judicial proceedings (bankruptcy, receivership, probate, conservatorship, dissolution of marriage) unauthorized by court
- Deed following judicial proceedings subject to appeal or further court order
- Deed following judicial proceedings where all necessary parties were not joined
- Lack of jurisdiction over persons or property in judicial proceedings
- Deed signed by mistake (grantor did not know what was signed)
- Deed executed under falsified power of attorney
- Deed executed under expired power of attorney (death, disability, or insanity of principal)
- Deed apparently valid, but actually delivered after death of grantor or grantee, or without consent of grantor
- Deed affecting property purported to be separate property of grantor, which is in fact community or jointly owned property
- Undisclosed divorce of one who conveys as sole heir of a deceased former spouse
- Deed affecting property of deceased person, not joining all heirs
- Deed following administration of estate of missing person who later reappears
- Conveyance by heir or survivor of a joint estate who murdered the decedent
- Conveyances and proceedings affecting the rights of service member protected by the Service-Members Civil Relief Act
- Conveyance void as in violation of public policy (payment of gambling debt, payment for contract to commit crime, or conveyance made in restraint of trade)
- Deed to land including “wetlands” subject to public trust (vesting title in government to protect public interest in navigation, commerce, fishing, and recreation)
- Deed from government entity, vulnerable to challenge as unauthorized or unlawful
- Ineffective release of prior satisfied mortgage due to acquisition of note by bona-fide purchaser (without notice of satisfaction)
- Ineffective release of prior satisfied mortgage due to bankruptcy of creditor prior to recording of release (avoiding powers in bankruptcy)
- Ineffective release of prior mortgage or lien, as fraudulently obtained by predecessor in title
- Disputed release of prior mortgage or lien, as given under mistake or misunderstanding
- Ineffective subordination agreement causing junior interest to be reinstated to priority
- Deed recorded but not properly indexed so as to be locatable in the land records
- Undisclosed but recorded federal or state tax lien
- Undisclosed but recorded judgment or spousal/child support lien
- Undisclosed but recorded prior mortgage
- Undisclosed but recorded notice of pending lawsuit affecting land
- Undisclosed but recorded environmental lien
- Undisclosed but recorded option, or right of first refusal, to purchase property
- Undisclosed but recorded covenants or restrictions, with (or without) rights of reverter
- Undisclosed but recorded easements (for access, utilities, drainage, airspace, views) benefiting neighboring land
- Undisclosed but recorded boundary, party wall, or setback agreements
- Errors in tax record (mailing tax bill to wrong party resulting in tax sale, or crediting payment to wrong property)
- Erroneous release of tax or assessment liens, which are later reinstated to the tax rolls
- Erroneous reports furnished by tax officials (not binding local government
- Special assessments which become liens upon passage of a law or ordinance, but before recorded notice or commencement of improvements of which assessment is made
- Adverse claim of vendor’s lien
- Adverse claim of equitable lien
- Ambiguous covenants or restrictions in ancient documents
- Misinterpretation of wills, deeds, and other instruments
- Discovery of will of supposed intestate individual, after probate
- Discovery of later will after probate of first will
- Erroneous or inadequate legal description
- Deed to land without a right of access to a public street or road
- Deed to land with legal access subject to undisclosed but recorded conditions or restrictions
- Right of access wiped out by foreclosure on neighboring land
- Patent defects in recorded instruments (for example, failure to attach notarial acknowledgment or a legal description)
- Defective acknowledgment due to lack of authority of notary (acknowledgment taken before commission or after expiration of commission)
- Forged notarization or witness acknowledgment
- Deed not properly recorded (wrong county, missing pages or other contents, or without required payment)
- Deed from grantor who is claimed to have acquired title through fraud upon creditors of a prior ownerAnd extended coverage may be requested to protect against such additional defects as:
- Deed to a purchaser from one who has previously sold or leased the same land to a third party under an unrecorded contract, where the third party is in possession of the premises
- Claimed prescriptive rights, not of record and not disclosed by survey
- Physical location of easement (underground pipe or sewer line) which does not conform with easement of record
- Deed to land with improvements encroaching upon land of another
- Incorrect survey (misstating location, dimensions, area easements, or improvements upon land)
- “Mechanics’ lien” claims (securing payment of contractors and material suppliers for improvements) which may attach without recorded notice
- Federal estate or state inheritance tax liens (may attach without recorded notice)
- Preexisting violation of subdivision mapping laws
- Preexisting violation of zoning ordinances
- Preexisting violation of conditions, covenants, andrestrictions affecting the land
Let First American help you avoid title problems.
