A title insurance policy helps to protect both someone who is buying a property and their lender from the risk of financial loss. If there turns out to be an issue with the ownership documentation for the property, both the buyer and their lender can count on title insurance to cover legal costs and reimburse the policyholder for what they have invested in the property thus far.
Of course, the process of securing title insurance can sometimes be a hassle. When something fishy shows up on the title record for the property, it will need to be subjected to a curative process before the company will underwrite a policy.
What does the title curative process involve?
The goal is to remove owners or blemishes
Often, the curative process must occur because there is someone on the title records who does not currently have an ownership interest in the property. For example, the person selling the home may have divorced, but their former spouse could still be on the county recorder’s paperwork.
Executing a deed can remove someone from a title or revert ownership from a trust back to an individual, thereby making it easier to transfer ownership at the closing table. In some cases, curative issues will require clarifying the property boundaries or any easements that apply. There could also be outstanding liens that affect how someone uses the property that they may need to remove from their title records.
The curative process seeks to eliminate the blemishes on record so that the title insurance company can underwrite the policy.
Curative steps don’t always fix the issue
What a title company requires and what truly addresses the underlying issue can often be vastly different. Large title companies that turn out dozens of title reports and policies daily often do not put adequate effort into finding and resolving issues with a specific property.
Those who worry about title issues could benefit from partnering with a local company rather than going through a large corporation. Those who are buying real estate typically have the right to choose the title service provider used for a transaction. Learning more about what happens during the title search process and title policy underwriting with the assistance of a legal professional can help people understand this confusing step that is often required in real estate transactions.