Tacking to Loan Policies
The industry standard for a proper title search is 30 years. An acceptable short cut, as many of you know, is to search back to a Developer, if there is one in the chain. And of course, the most commonly utilized short cut is to tack to an Owner’s Policy. But did you know that you could tack to a Loan Policy? It is an industry standard to permit tacking to a Loan Policy, but you have to understand what you are getting into. If the Loan Policy was issued as part of a refinance, then it was likely generated pursuant to an abreviated search since refinances only require current owner searches. Consequently, the loan policy may be missing some key information that may be located in the chain of title, simply because the attorney that did the search for the refinance was not required to search beyond the current owner.
Additionally, pay careful attention to the exceptions on the loan policy. Remember that we will copy over on to the new commitment any exceptions found on the policy that was tacked to. If the loan policy that you are tacking to has a funky exception, we have to include it in our new commitment. (Oftentimes, the only way to avoid that funky exception is to expand the search period.) Be especially careful with tacking to Short Form loan policies. While you can tack to them, they often include very broad exceptions (such as: “All restrictive covenants of record.”)
Again, if it is on the policy you are tacking to, we have to carry it over to the new commitment. If you do tack to a Loan Policy, then you can limit your search to the outs for the current owner. Because of the abbreviated nature of the search, we may choose to supplement the commitment with some broader exceptions, for example, an exception for restrictions if we have reason to believe that the property is in a Planned Unit Development.
Lastly, even if you are not inclined to tack to a loan policy, for whatever the reason, remember that we can use it to apply a discount. So, even if you do a full search if you found a loan policy in the chain, send it to us with your opinion so that we can give your client a discount.
Looking Ahead In 2019
2018 was a wonderful year thanks to all of you! And here at Barristers we’re always energized by the prospect of a New Year and all that is to come. Here are few things we’re looking forward to in 2019 and we hope you’ll join us!
A Fresh New Look: Updated Barristers Logo & Website!!!
Wire Fraud Seminar
March Madness Barrister’s Bracket Challenge
2019 Real Property Annual Section Annual Meeting
Annual ReelTime CLE & Customer Appreciation Month
You’re missing out if you didn’t get to see our annual Video Holiday Card!
Click HERE to watch it!
Happy New Year!
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What’s The Word?
There is an intentional misspelling error in the Tacking to Loan Policies Article above. Be the first person to find the misspelled word in the article to win a prize! E-mail Summer with your guess!