What are the duties of a title company for a residential escrow refinance?

Answer 1

This is a state specific question, since in some states, the escrow company is a separate entity from the title agency. Therefore, I will answer the question assuming that the title agency is also acting as the closing/escrow agent. If the title agency has been hired to provide a Report on Title (Property Report) only, they will search the abstract (history) of the property of the present owner only. The Report will be issued, but no title insurance coverage will be provided. This is typical in smaller HELOCs where the lender does not require insurance, but does need to know condition of title. If the title agency has been hired to provide Lender's title insurance coverage, they will do the current owner search(es), provide a Commitment/Binder to insure. There will be certain requirements that must be met (paying off current loan, taxes must be paid current, etc.). Either the title agency, loan officer or the borrower may be responsible for obtaining the actual payoff statements from the appropriate parties. Once all conditions are met and the lender is ready to close and the title agency is the settlement/escrow agent, the lender will send the loan documents to the title agency along with their closing instructions. The title agency will prepare the HUD-1 Settlement Statement and send it back to the lender for review. Once the lender has approved the final HUD-1 Settlement Statement, the closing will take place. The title agency will witness the signing of the loan documents with the borrower and will also require certain title documents also be signed. They will collect copies of the borrowers' IDs along with any other items required by the lender (Marriage Certificate, proof of homeowner's insurance, etc.) The loan documents are sent back to the lender and the borrower has a 3-day recission period to decide if they want to go through with the loan. (This applies only if the property being refinanced is the primary residence. Investments and second homes are funded the same day, although the lender may not release the funds until the loan docs are back in their office.) Once the recission period has passed, funds will be sent to the title agency. They will disburse the funds according to the HUD-1 Settlement Statement, paying off the current mortgage, taxes, credit cards, etc (whatever was listed to be paid at time of closing). If a figure changes from the time of closing to time of disbursement, the borrower is still responsible for full payment of whatever is owed and that adjustment will be made by the title agency. (They will contact you on any issues at funding) The title agency is usually responsible for recording all documents such as mortgages, deeds, subordinations, etc. They will record the same at the county or municipal level. Once the recorded documents are properly indexed with the Recorder's Office, the title agency will order a cover record, which is a final search that shows the prior mortgage discharged and the new mortgage recorded. At that point, they will update the file and issue a Mortgage/Lender's Policy to the lender.