Tuesday, April 29, 2008

query: does title policy follow the mortgage on a sale

I presume you mean the sale of the mortgage. Yes, when a mortgage loan is sold, the loan policy follows it based on the phrase "its successors and/or assigns" which is typically found on Schedule A following the name of the insured mortgage lender.

If for some reason this language is missing, I don't know if the title company would cover a claim.

1 comment:

Peter said...

Generally the "insured" is defined by the different form policies as the insured named in Schedule A and the owner of the indebtedness secured by the insured mortgage; any governmental agency which is an insurer or guarantor under an insurance contract and an insured who acquires title through foreclosure or deed in lieu or any other means. The coverage continues in favor of the insured after conveyance of title so long as the insured has an interest in the property, holds a debt secured by a PMM or has liability for a breach of warranty.

Hope this helps.