If you have made an offer on a home, and if you are heading towards the closing date, you may be wondering what is involved in the title insurance underwriting process that will be ongoing in advance of the closing date. Through this article you are provided with the information that you need to know and understand when it comes to making the purchase of Tampa real estate.
The first step that occurs in the title insurance underwriting process is the engagement of the title insurance company in the first instance. In many instances, the home mortgage lender will engage the title insurance company as that entity will have a great deal at risk if it issues a loan that is tied to a piece of property that ends up having a defective or clouded title. On the other hand, there are instances when the seller will contact the title insurance company in the first instance. The buyer can even be the person that initiates the underwriting process in the first instance.
At this juncture, a title insurance underwriter actually will do hands on research to make certain that there are no liens or clouds on the title. This process is undertaken in most cases at the local county courthouse in the office of the register of deeds.
The register of deeds' office will contain the original copies of deeds and encumbrances and releases that have been placed or removed from a particular deed. In this way, by taking a direct look at these vital, crucial documents, the investigator or underwriter will be able to ascertain whether or not there are any encumbrances, liens or defects to the title.
When you purchase Tampa real estate - or real estate anywhere for that matter - it is vital that you be able to obtain clear title with no encumbrances or defects. If the underwriter or investigator does find problems with the title, he or she will then embark on a course to clear the title. This generally involves making sure that a previously satisfied lien on the property be released. (The most common problem is a lien that has been satisfied but that the release of which has been overlooked for one reason or another.)
Ultimately, when the research has been concluded - technically called a title search - and when any problems have been dealt with, the title insurance company will issue a green light and a title insurance policy that will clear the way for closing. Fortunately, in the vast majority of cases there are no problems associated with the title. Moreover, if a problem is discovered, it can be dealt with in the advance of the scheduled closing doubt.
In those isolated instances when this cannot occur, when the title defect cannot be rectified before the scheduled closing date, the general practice simply is to reschedule the closing date a bit farther down the road. The typical real estate sales contract actually may provide for such a possibility. Of course, it is incumbent upon the seller to be able to convey clear title in order to the sale of the real estate to be consummated and the closing to be held in the end.
Lance Mohr is a full time licensed broker associate with Keller Williams Realty. He has over 10 years of experience helping families buy and sell real estate, as well is being a real estate investor. If you have any questions about the Tampa Real Estate or New Tampa real estate market please visit my website at http://www.tampa2enjoy.com
Filed under Home Insurance by on Jun 6th, 2010. Comment. 
moral hazard/asymmetric info.?
Is the following scenario an example of moral hazard or adverse selection? First define the terms and then explain how
the scenario illustrates the appropriate concept. For each answer, describe what market is affected, how the market is
affected, and the nature of the inefficiency.
a) Jasmin, a 25 year old healthy woman, does not buy health insurance. Marcus, her 75 year old father with
symptoms of Alzheimer’s disease, does buy health insurance.
b) A large bank offers home mortgages to potential home buyers with less credit worthiness than what is
considered good practice because it can sell the mortgages to an agency in the federal government which will
assume the risk.
thanks a lot.
this is from a study guide. it's just one of the many questions in it. it will help me study, so it would be great if you can help me with this.
thanks a lot!!!!
Asymmetric information deals with situations where one party in a contract has more or better information than the other. The situation where the person with Alzheimer buys health insurance is likely to be a problem of information asymmetry, if the insurance company is not aware of his condition. He has more or better information on his health condition than the insurance company. If the insurance company accepts the person under a health insurance poilicy without knowing the fact that the person suffers from Alzheimer, this will result in a situation where the person will pay an insurance premium which is too low for his health condition and will not sufficiently compensate the insurance company for the risk. This is called an adverse selection resulting from information asymmetry for the insurance company.
Moral hazard, on the other side, is a situation where a party does not have to bear the negative consequences of the risk resulting from his or her action. This is best characterized in an unfair game of throwing a coin with the result "tail, I win, head, you lose". The bank offering mortgages to home buyers who are likely to default on their payments is an example of moral hazard: they make money by selling the mortgage to a government agency, but the bank does not assume the risk of the borrower no longer being able pay the interest rates and the default risk on the mortgage payment. The bank only takes the profit but not the loss. The loss is taken by the government agency. This will cause the bank to behave recklessly because they are only exposed to the upside, not to the downside; "tail, I win, head, you lose".
Filed under Home Insurance by on May 18th, 2010. Comment.