Wednesday, October 26, 2011

query: title underwriter cannot find policy

Interesting.  Hard to say whether the underwriter had a failure of good document protection or the agent failed to remit.

Might seem strange but this isn't that unusual of a happenstance.  You see, unless the title insurance agent SENDS a copy of the policy to the underwriter, they don't have a copy.  Title insurance agents create policies after the closing.  They then send the premium along with a copy of the policy to the underwriter.  Agents are supposed to do this pronto but some don't.  Some title agents do bad things like use the premium money for operating expenses and then go out of business before ever sending your policy to the underwriter.

What can YOU do as a consumer to solve this problem?  You can present a copy of your title insurance commitment and HUD-1 form.  The underwriter will look to see their name on both and then - even if the commitment isn't "marked-up" - should accept both documents as evidence of insurance.

If you didn't get a copy of your title insurance commitment prior to closing, your mortgage lender may have a copy.  If you paid cash, you'll have to try to make your case with just the HUD-1 form.  If the HUD-1 doesn't list the underwriter, you may not be able to make the case that you are insured through this company because the agent may have represented more than one underwriter.  In that case, seek help from an attorney, the state insurance regulator, or state attorney general.

The query raises the big issue of selection of settlement service providers - title insurance agents - and being a smart consumer.  Please shop for your provider and ask questions up front.  Look for professional demeanor and ask about getting a copy of the title insurance commitment prior to closing.  If you have any reluctance in the response, move on to another provider.  Make sure you review your commitment prior to closing, then when you review your HUD-1 form make certain the name of the underwriting company in the 1100 section of the form MATCHES the company on your commitment.

Good luck!

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