9100 Bluebonnet Centre Blvd. Ste. 102
Baton Rouge, LA 70809
Preferred Title Company (c) 2015
1. Who chooses the title company? The BUYER has the federally protected right under the provisions of the Real Estate Settlement Procedures Act (RESPA). The
LREC Purchase Agreement is prepared with the Buyer determining the settlement service provider (lines 38-39). Under Louisiana law the costs of the closing are
borne by the Buyer. Some people would tell you that when a seller pays some or all of the closing costs the seller should have the right to choose. This just is not
correct, it is still the Buyer who should make this decision, as the Buyer is the one paying the sales price, relying on the inspections and obviously wants to be assured
his or her interests are being protected. If your real estate agent or lender only refers you to one title company, ask them whether the title company is a subsidiary
or whether they have an arrangement whereby the real estate agent or the broker receives a payment or other benefit for the referral. This information is required
by Federal law to be provided to you at the time of the referral. Why is this important? You want to know who is representing your interests and whether any conflict
of interest may occur between your interests and someone else. PREFERRED TITLE COMPANY recognizes its responsibility to you, the customer, and will not close
on the transaction until all matters have been resolved. At lines 287-293 of the Purchase Agreement the BUYER should write in... "Pursuant to Lines 38-
39 of this Purchase Agreement, Buyer has chosen PREFERRED TITLE COMPANY as the settlement agent"... this will insure that your lender and the
seller know you have chosen the settlement agent of your choice.
2.What is Title Insurance? Unlike other types of insurance that give coverage for acts in the future, such as car insurance for damage to the vehicle in a future
wreck; title insurance insures against loss you may incur for acts which occurred prior to acquiring the property.
3. The lender requires us to buy title insurance, doesn't that cover us? The Lender's Policy insures only the Lender up to the amount due on the mortgage.
The owner has no protection under the Lender's Policy. If there was a loss of title, the Lender would recover its money, assign the note the title insurance company
who would then look to the owner to pay off the loan. What's worse, the owner may not have title to the property.
4. Why would we need an Owner's Policy, didn't an attorney examine the abstract of title? Both the Lender and Owner policies insure against loss from
title defects which are not discoverable by a complete and thorough title examination, such as mis-indexed documents, and unrecorded documents. It also provides
coverage for errors which are made in the title search itself. While there must be an abstract of title prepared for examination by a Louisiana attorney for any policy
of insurance to be issued, in Louisiana the attorney's malpractice liability is limited to one (1) year from the time you know of the error but not more than three (3)
years from the date of the act. The Owner's policy provides you protection for as long as you own the property and even after you sell the property, for no additional
5. Isn't Owner's Title Insurance expensive? Not when you consider the amount covered for a one-time payment. Title insurance is not an annual premium like
fire insurance, and Owner's title insurance is usually purchased simultaneously with the Lender's policy, and as a result a significant discount results in a relatively low
cost for the coverage afforded under the Owner's Policy of Title Insurance. An Owner's policy insures you are the owner of the property, that there are no mortgages,
judgments or liens against the property except those listed in the Policy (which are those you know about, like your mortgage), it insures you against claims by a
subsequent purchaser that you title is not merchantable due to a title defect, and insures you have access to the property among many other matters.
6. What information will the title company need from me before closing? The title company will contact you to obtain full names of you and your spouse,
year of birth and last 4-digits of your social security number. This is needed to confirm your identity when the land records are searched. We will also need the name
of your homeowner's insurance agent and any other information needed to complete the preparation of the closing documents.
7. How long does a closing take? It is our experience that a sale with mortgage will last an hour on average; and that a refinance can be completed in 30
minutes. However we suggest that you allow for additional time for later arrivals of parties, documents and funding approval from lenders.
8. Do I need to bring anything to the closing?
Proof of Identity: We require that you bring to the closing a government issued photo ID, ie current driver's license, passport, or military ID which we will copy for
our file. First we need to determine that the parties appearing before the Notary are properly identified, and second, we are required to comply with the US Patriot Act
to confirm your identity. Your lender may require additional information such as a social security card or other photo ID, and we advise you to always bring at least
two forms of identification in the event your lender requires this for closing.
Funds for closing: In order to disburse funds at the closing the title agent must have collected funds on deposit the day of the closing from the parties to the
transaction being disbursed. Although Louisiana law does provide that a title agent may disburse without collected funds, if those funds are "good funds" as defined by
the Insurance Code and deposited within the time frames set out in LRS 22:511 such as certified checks issued by your bank drawn on your account, it is at the title
agent's discretion to disburse or not upon receipt of "good funds". To assure that all funds will be timely disbursed you should be prepared to bring the amount you will
need in certified funds or call our office for wiring instructions to wire your funds to our escrow account. All disbursements are subject to Positive Pay policies to assist
our bank with preventing fraud.
Documents: Your lender may have requested that you bring certain documents to closing for loan approval such as gift letters or proof of home-owner's insurance.
9. Who will attend the closing?
Buyer and Seller: The parties to the purchase agreement must be present at the closing. That would include all owners of the property for a loan refinance as well.
Should you know in advance that one of the parties will not be able to attend the closing, you should immediately contact our office to determine if a power of
attorney or other document can be used to have another person sign for that individual.
Real Estate Agents: Agents for the Buyer and Seller will the closing to assist their clients.
Lenders: Often a representative for the lender will be attend to assure all loan documents are completed.
10. Do I need to have a survey of the property? Your lender may tell you that a survey is not required. That is because the lender is often provided survey
protection under the provisions of the Lender's Policy of title insurance. You, the owner, are not protected under the Lender's Policy. We recommend you consider the
need for a survey of the property you are purchasing. If you determine that you will require a survey, the survey should be ordered at least two(2) weeks before the
closing so that the surveyor can complete his work for your review. Under the LREC Purchase Agreement the survey must be done during the inspection period which
is usually ten (10) following the effective date of the contract. On new construction the builder may have a "slab" survey or an "as-built" survey which they may
provide you for your records.
11. What happened to the HUD-1? BEGINNING OCTOBER 3, 2015, the separate HUD-1 Settlement Statement and the Truth-in-Lending Disclosure
have been replaced on most Single Family Residential 1 - 4 transactions. The lender will issue a "Loan Estimate" (LE) which will disclose information regarding the
loan applied for by the consumer (f/k/a borrower). For the closing, those items once disclosed on the Settlement Statement and Truth-in-Lending Disclosure are now
presented on a 5-page document entitled "Closing Disclosure" (CD). The Lender will be subject to new time delays and restrictions regarding both the LE and the
CD. The Lender will prepare the LE and the CD for the closing and will present only to the consumer. The lender will not provide copies of these to the seller or the
real estate agents. The CD must be provided to the consumer at least 3 days before the consummation of the transaction (f/k/a Closing). Changes in the APR,
changes in loan terms such as a pre-payment penalty, or other terms of the loan will require the Lender to re-disclose to the borrower resulting in a minimum 3-day
postponement of the closing. Lenders, real estate agents and title companies are working together to make sure these new rules do not upset the closing plans of
consumers and sellers. You can learn more about these disclosures and other matters which are referred to as "Know Before You Owe" by going to the Consumer
Financial Protection Bureau webiste at http://www.consumerfinance.gov/knowbeforeyouowe/
The HUD-1 settlement statement will be used for those real estate closings which are not subject to the CFPB LE and CS disclosure forms, for example cash sales and
owner financed transactions will be disclosed on the HUD-1 Settmement Statement.
12. How do I file for Homestead Exemption? Pursuant to the Constitution of the State of Louisiana, the owner-occupant of a primary residence is entitled to file
for an exemption from State and Parish taxes on the first $75,000 of value of the property. This exemption from property taxes does not apply to city taxes. In the
Act of Sale there will be a statement to the Assessor that tax bills are to be sent to the buyer at an address that the buyer provides, usually the home address. After
the sale the homeowner must file for the exemption with the Parish Assessor. You will be advised at the closing where and when you should file for the exemption.
AND DON'T FORGET TO CHANGE YOUR VOTER REGISTRATION TO THE NEW ADDRESS.
9100 Bluebonnet Centre Blvd.
Baton Rouge, 70809
There are New Rules
and New Forms being
used for residential
closings. Find copies of
the forms for review
Did you know
Louisiana law requires all
abstracts to be read by
Read here to learn more.