“A team is only as strong as its weakest player.” “A chain is only as strong as its weakest link.” Do you remember these sayings? The mantra also applies to a Hard Money Lender’s team and specifically to their Title and Escrow Company. Having a solid Title and Escrow Company in any real estate transaction prevents fraud, costly errors, time delays, loss of the transaction and loss of capital. In today’s Blog we will review the top 7 Title and Escrow Company Attributes for Brokers and Lender’s to validate in your next real estate transaction:
- Reputable Title Company: There are many licensed Title Companies. Not all execute the same. Effective Title and Escrow companies answer the phones/emails and respond quickly whether at origination or in claims management.
- Timely Preliminary Title Reports and Request for Payoff Demands: Successful Title Companies have access to modern Title Plants that conduct Title Research efficiently. Once the Preliminary Title Report is provided, the Title Company should immediately tackle any payoff, lien or cloud on Title issues. Smart Escrow officers know how to quickly navigate bureaucracies to get Payoff Demands.
- Handle Insurance Claims Responsibly: Title claims are rare but when they arise, a lender needs the Title Company to answer the phone, be responsive, acknowledge the claim and pay the claim. Sounds simple but many Title Company claims departments are outsourced with nobody home. Recently, during the disposition of a property where we had made a loan, the new Prelim showed a $3+ million federal tax lien. Our National Top Rated Title Company stood by their Insurance Policy and resolved the claim and restored our lien priority.
- Sniff out Fraud or Title problems: Having an experienced Advisory Title Officer and Escrow Officer can make or break a finance transaction. Experience matters. Schemes to “Dupe the Lender” are rampant and all parties involved need to stay keenly attentive to any questionable title, identity, property or lien items.
- Cordial and Professional Notaries: Notaries for Loan Document signings should be experienced and know at a high level what is in the documents being signed. Clueless Notaries are a big frustration for borrowers who are signing documents in one of the biggest financial transactions of their life.
- Title and Escrow Same Company: Having Title and Escrow in the same company provides efficiency to the finance transaction. Many closing tasks have to be complete to get a loan done quickly and our experience suggests that having a Title Officer and Escrow Officer working from the same production system minimizes errors, finger pointing and last minute mistakes.
- Outstanding Title Plant, Title Production, Escrow Tracking and Self Service Technology: Successful Title companies have invested heavily in Technology to facilitate a finance and or real estate transaction. The Software needs to seamlessly support the workflow of the participants and also provide the lender and consumer with a Portal to facilitate self-service and transaction management.
Have you had a good experience with your Title Company? We would like to know.