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  Protect Your Title!  
What you need to know about
Title Services

At Bauer Mortgage Group, we take pride in explaining all of our fees. The title fee can seem mysterious, but in truth, a lot of work is done behind the scenes on your title. Our primary title services provider is Signature Title (link to page) in Portsmouth, NH. They have incredible attention to detail and exceptional customer service, both of which make a big difference in successful mortgage transactions.
Our clients who have used online services or non-local companies tell us horror stories about title issues. Critical steps are frequently missed, or title fees are discounted and then contracted to a cheap, inexperienced resource. This signals trouble and even worse, you might not even know of the problems until years later, when you try to refinance, sell your home or consolidate debt.

For example:

  • If payoffs are incorrectly calculated, it could cost you money and cause you headaches after your close.
  • If you buy a home and your seller’s loan is not discharged, you could have serious problems when you go to sell or refinance.
  • If the title search is not thorough, issues from 25 years ago could come back and haunt your transactions and your ability to sell your home.
To these stories, we can unfortunately only recite the old adage “you get what you pay for.” We collaborated with Signature Title to put this web-resource that explains the process that title companies follow.

Understanding the Title Process

The deed and title are the legal documents that stay on file at your local registry of deeds. The deed describes your property exactly, and the title describes ownership, which is generally you and your lien holders. Lien holders are the lenders who provide financing, and there’s generally one, though with second mortgages becoming popular, there are occasionally two.

The title search is done to ascertain exactly which lien holders are on the title, ensure that’s it’s free and clear to be transferred (ie, it’s not tied up in divorce or estate lawsuits), and work out any important details about the property prior to the bank agreeing to finance it.

An abstractor physically visits the registry of deeds, views and copies the deed and title. It’s essential that someone actually visit the registry to get a complete look at the documents, because the physical copy represents the final legal word on the property. Incomplete research, such as not physically seeing all the pages of the deed and title, can mean major problems down the road.

A title commitment is prepared, once the legal documents are reviewed by the title company. This document commits to the lender that there are no issues with the deed and title that would keep it from being insured. Further, it commits that once the loan closes, the new lender will be in the “first position” on the title. In the case of a refinance, the new lender will replace the former lender in the first position.

Closing figures and payoffs have to be updated and verified. This is complex and different every time. People like Karen Kutensky, our dedicated processor at Signature Title, have seen it all. She deals with many different lenders, town offices and administrative people to determine the final correct numbers for the sale transaction.

This detailed process includes getting the payoff amount for the current lender and any debt, such as credit cards, that you are paying off with the new loan. In the case of a refinance, payoff numbers come from your current lender, in the case of a purchase, the payoff amount comes from the seller’s lender. Property taxes are researched, including when they will need to be paid by the new lender and what has been collected in escrows. Escrow amounts need to be determined. This includes the starting amount to be collected for escrows (so that there’s money in the account to pay the taxes when they are due) and any escrow monies to be refunded to you or the seller from the old lender. During this process, the homeowners insurance is updated with the new lender’s information.

Closing documents and the HUD statement need to be prepared. The inch high plus stack of closing documents includes all of the legal information from the bank. The HUD statement is a form developed by the office of Housing and Urban Development to ensure consistency and full disclosure with real estate transactions. The HUD statement summarizes the numbers involved in the transaction, including how much the existing lender will be paid, how much the bank, title company and mortgage broker will be paid, and, in a purchase, how much the seller will be paid.

The closing. At this meeting, the borrower, seller (if it’s a purchase), title company, and a Bauer Mortgage representative sit down and review all of the loan documents. Bauer representatives attend client’s closings to make sure all questions are answered. In the case of a purchase, the seller’s lender gets paid off, the seller receives a check for any profits and the buyer/borrower gets the keys to their new home. In a refinance, the old lender gets paid off, and the borrower gets a new loan payment and details about their new lender. It is the next step, however, which is crucial.

The deed and title are updated and the old loan discharged. After the loan is closed, the old lender gets their money so the old loan is completely paid off. In the case of a purchase, this old loan is the seller’s lender, who is paid off during the sale of the home. In the case of a refinance, this old loan is the loan from your previous lender. Then this payoff or “discharge” has to be recorded at the registry of deeds and the new lender is added to the title in the first position.

Loan discharge is verified. After a payoff check has been sent, we will verify that the loan has actually been discharged and the new lender appears as the first lien holder. It’s critical that this is verified. If for some reason an old loan is not discharged properly in the registry of deeds, it could prevent you from selling your home or refinancing it. Even if all of the original paperwork and people can be located, it could significantly slow you down in the future and cost you money.

Selecting a Title Company

We use Signature Title for the majority of our transactions, but there are others who we use after following a screening process. When choosing a title company, we consider the following factors:
  • Location: It is essential to use a company with local knowledge of resources such as the registry, tax assessor, etc. The company must have knowledgeable, detail-oriented and high-quality staff including attorneys, abstractors, notaries, closers and processors.
  • Experience: No two loans or lenders are the same. It is critical that the title company has experience with many types of loans and situations. Everyone on their staff must be well trained and able to handle complex loan scenarios.
  • Attention to Detail: It is of utmost importance that the title company is meticulous about details. One misstep can cause your loan not to close, or potentially be disastrous when you try to sell your home and transfer the title.

Whether you choose Bauer or not, we hope that you think carefully about what you’re getting -or not getting- with your title company. Getting the title updated correctly is far more than an administrative detail or additional fee. The title is a critical component of property ownership and mishandling of it can mean extreme consequences. If someone waives this fee for you, provides a hefty discount or can’t explain their title services, remember – you get what you pay for.

If you have more questions about title services, Bauer and Signature would be happy to answer them. Please email us or call anytime at 603-430-7729!

Seacoast Bauer Mortgage Group
(603) 430-7729
Toll free: (888) 252-2837 
Fax: (603) 430-0008
170 State Street, Portsmouth, NH 03801

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We are an Equal Housing Lender and affiliate member of the Seacoast Board of REALTORS(r). All content Copyright (c) 2003, Bauer Mortgage Group, LLC. Licensed by the New Hampshire Banking Department. ME License #CF0-5633.