The question of property title searches is something that comes up on every real estate transaction. It used to be that, on a closing, the real estate lawyer would perform a full property title search which would include validating who the homeowners were and uncovering any encumbrances against the property. These days, the real estate lawyer will often review the property’s Parcel Register, which contains this information, and require the buyer to purchase title insurance to protect them from any future issues that could come up as it relates to a property’s title.
Applications typically come to lenders one of three ways: the client applies directly because the lender has a retail presence, through a mortgage broker or agent, or through a real estate broker or agent. While some mortgage and real estate brokers and agents do the due diligence to validate homeowner information, others do not.
In all cases, while the client or broker/agent may tell the lender that the client owns the property, there could be other people on title or some other information that may change the lender’s decision to lend.
In the extreme example, if this non- or incorrect disclosure was intentional, this is a form of mortgage fraud. If it was an innocent oversight, this may simply mean that more deals will be canceled at some point in the underwriting process once it is identified that the home ownership information is not what was disclosed on the application.
Some lenders don’t take the steps in the underwriting process to validate homeowner information and leave it up to the real estate lawyer to do so. This is usually because lenders don’t realize they can do it themselves, or think that to do it they need a property title search which is perceived by some to be costly. This can then lead to increased bad debt as a result of fraud deals that leak through, reduced closure rates and an increased cost to underwrite applications.
It saves lenders both directly financially and indirectly financially to give their underwriting teams the capability to validate home ownership information. So the question is: do you need a real estate lawyer or a property title search to validate home ownership information? The answer is no.
There are real estate tools available to lenders that enable them to validate homeowner information. Doing so early in the transaction will mean higher closure rates, happier partners (lawyers, appraisals etc…), reduced cost of underwriting and more…
Thanks to technology, you no longer need to have a property title search performed to validate homeowner information. Taking advantage of technology that can enable you to be more agile will make you more competitive and put you in a position to book more business and better business!
For more information about how you can validate homeowner information please visit www.puview.ca/lenders or call 1-855-787-8439.
If you are already a Purview For Lenders client and are interested in learning more about how to validate homeowner information please click here to watch a brief training video.