Useful Information

Protect Yourself From Cyber Fraud

Watch the video or read below to learn how to protect yourself from cyber fraud.

How Your Money Gets Stolen

1. Hacked email – Hackers get access to the email account of someone involved in the
   transaction – the buyer, seller, real estate agent, mortgage lender, title agent, or other.
2. Email from hacker – The hacker then emails that person to change the wiring or
   payment instructions without knowledge from the other parties.
3. Consumer pays wrong account – If not questioned, the wrong account gets the down
   payment or other funds and the criminal gets away.
4. Closing day – By the time closing day arrives and the mistake is realized, often the
   funds are long gone.

How to Avoid Wire Fraud

Rule 1: Always question emails that contain wiring instructions.
Hackers have learned to exploit the real estate closing process to steal millions of dollars from
people buying or selling a home.

Rule 2: Always call before sending any money.
When you do receive instructions on where to send money prior to closing, always call your
contact person at the title company to verify. Then call your bank to verify as well.

Rule 3: Always call after sending money.
It’s always a good idea to call right after money is sent. That way, you can verify that it was
received by the correct recipient.

Rule 4: Act immediately if anything seems unusual.
Contact your bank, mortgage company, and title company immediately if anything is in question.
If something is wrong, you may need to contact your local FBI office.

What is Title Insurance?

What is Title Insurance?

Title is a bundle of rights in real property. Protecting purchasers and lenders against loss is accomplished by the issuance of a title insurance policy. Usually, during a purchase transaction the lender requests a policy (commonly referred to as the Lender’s Policy) while the buyers receive their own policy (commonly referred to as an Owner’s Policy).

When rights to real property are transferred, insurance is generally purchased to cover potential losses which could result from unforeseen defects in the title. For instance, a lien on the property that went undiscovered during the purchase transaction could pop up, years later, and result in losses for either the homeowner or the bank that financed the transaction. In the event of such a loss, the title insurer would cover the expenses in accordance with the terms of the policy.

Generally, lenders and owners carry separate policies. The Lender’s Policy insures the lender for the amount of the loan. The Owner’s Policy insures the purchaser for the purchase price.

How is title insurance different than other types of insurance?

Unlike other types of insurance policies, such as homeowner’s insurance which are designed to cover expenses incurred from unforeseen future events, such as accidents or natural disasters, title insurance covers future losses caused by events that occurred in the past.

Title insurers perform an extensive search and examination of public records to determine whether there are any adverse claims (title defects) attached to the subject property. Said defects/claims are either eliminated prior to the issuance of a title policy or their existence is excepted from coverage. Your policy is issued after the closing of your new home, for a one time nominal fee, and is good for as long as you own the property.

What’s involved in a title search?

A title search is actually made up of three separate searches:

• Chain of Title – History of the ownership of the subject property
• Tax Search – The tax search reveals the status of taxes and assessments
• Judgment and Name Search – Identifies judgments and liens against the owners and purchasers

Once the three searches have been completed, the file is reviewed by an examiner who determines:

• Does the seller have the legal right to transfer title to the property?
• Are there current or past-due taxes or assessments that must be paid, prior to title transfer?
• Are there any liens or other unpaid settlements against the owners or the property that must be paid?

Rights established by judgment decrees, unpaid federal income taxes and mechanic liens all may be prior claims on the property, ahead of the buyer’s or lender’s rights. The title search should discover any title defects that are of public record, thus allowing the title company to work with the sellers to resolve them, prior to closing.

In Summary

Once the searches have been completed, and known defects resolved, the title company issues a policy stating the conditions under which it will insure title. Most undiscovered defects are covered by the insurance policy.