Wednesday, May 09, 2007

query: difference between effective date and issued date on title commitment

The abstractor will note a cover date of the title search. This is the date through which the courthouse records are up to date in the index. The abstractor can't go further in time than the records allow. The cover date would be the effective date of the title commitment. The date of issuance would be the date the commitment is issued by the agent.

As an example, I may be examining an abstract today, May 9th, with a cover date of May 1st. My effective date of the commitment is May 1st even though I am issuing the commitment today.

Commitments are good for 6 months. While we may do bringdowns before the issuance of a policy it is not necessary to keep reissuing title commitments. Some mortgage lenders have a hard time understanding this, especially when a transaction closing has been delayed.

If the title commitment effective date is older than the lender likes, we don't re-issue the commitment, we simply write a letter giving the dates of the interim bringdowns. That usually satisfies the lender.

No comments: