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How Can You Avoid Title Defect & A Failed Title Settlement

by amelia b. Seo writer

New homeowners tend to assume that once all documentation is signed over at the closing table, they are declared officially as the owners of their new home. Unfortunately, sometimes this transaction is not as smooth as one assumes. Under some circumstances, there are some adverse situations that could threaten the legal rights to owning such prime real estate and becoming a titleholder of that property. These situations result in a title defect. 


To avoid this title defect, it is important that you engage premium mortgage servicing solutions, which aid in assessing these hidden issues that you may need protection from in the future. 


What Does It Mean to Have Undergone A Title Defect?


A title defect is any situation that could potentially threaten a current owner’s full right to claim or sell a property. The property you are now a new owner has a publicly-recorded issue, such as a mortgage, lien, or a judgment that gives someone else a partial or full-claim to the property. 


A title is similar to a bundle of sticks that can be divided or tied up and be distributed in a plethora of ways to as many parties as required. Each of these sticks represents a certain right, all of which can be exercised individually. Mortgage settlement services can help you find the right ways to aid in mortgage document management. They can assess the property title and the claim you can make over possession, control, exclusion, or enjoyment. 


Generally, the titleholder is considered the sole owner of the entire property and has the sole right to possession of the real estate. The title settlement could fall through if the current titleholder fails to pay the required utility bills or property tax. If these payments aren’t made, the governing authority places a lien on the property in order to recoup the money owed. 


Another reason that there’s a fall through on the title settlement could result from the owner taking out a mortgage loan in order to pay for the home, and the lender has a lien on the real estate, it may result in foreclosure on the borrower if they fail to meet all terms of the loan. 


Some Types Of Title Defects?


A title defect can also be referred to as a “cloud.” These title defects must be resolved before the selling of the property. 


  • Some Error in the public records of the property

  • Bankruptcies

  • Liens for child support

  • Liens on due spousal support

  • Delinquent taxes 

  • Other unknown liens

  • Illegal Deeds

  • Boundary Disputes

  • Forgeries

  • Undiscovered wills


All of these could result in a title defect, which causes a failed title settlement. 

 



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About amelia b. Advanced   Seo writer

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Joined APSense since, November 11th, 2020, From - Select -, United States.

Created on Dec 17th 2020 21:41. Viewed 197 times.

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