Frequently Asked Questions

What is title insurance?

A title insurance policy protects your interests and legal rights to own, use and sell land. Before issuing title insurance, a title insurance company performs an in-depth search to ensure that no one else has a claim to the land. There are two types of insurance — one protects the lender, and the other protects the purchaser.

What kind of title insurance do I need?

• The lender's policy is required in most cases to obtain a mortgage. It covers the amount of the loan and provides protection to the lender. The fee for the policy is typically paid by the borrower. There are some instances where the lender may pick up the fees on home equity loans.
• An owner's policy protects the owner against any title loss, which ensures the value of the property. The owner's policy insures both fee and leasehold interests.

What is a title search?

A title search is a detailed examination of the historic public records related to a property. These records include deeds, court records, property and name indexes, and many other public documents. In addition, as a result of the U.S. Patriot Act, title insurance companies are required to include a check of government lists of known or suspected terrorists and drug dealers as well as members of foreign governments.

How much does title insurance cost?

Title insurance fees vary in different parts of the country. However, it is a one-time fee and is often part of your closing costs. There are no additional premiums as you might have with car or homeowner's insurance.

How long does title insurance coverage last?

A lender's policy remains in effect until the mortgage is paid in full. An owner's policy lasts for as long as you or your heirs retain an interest in the property.

What is mezzanine financing?

Mezzanine financing offers a way for publicly and privately held companies to attain financing without going public and potentially ceding ownership of their company. It is a blend of traditional debt financing and equity financing, reaping some of the benefits of both. Like equity financing, mezzanine financing is an unsecured debt, requiring no collateral to be put up (as one would need with a traditional bank loan). Like debt financing, mezzanine financing is very fluid and does not necessarily involve giving up an interest in the company.

What is a tax deferred exchange?

Under Section 1031 of the Internal Revenue Code, as a taxpayer you can avoid the recognition of gain on the disposition of property if, instead of receiving cash, you receive "like kind" property. Property qualifying for Section 1031 tax deferred exchange treatment includes not only real estate but also personal property and equipment held for productive use in a trade or business or for investment.