Title
Insurance for Commercial Mortgage Lenders
First Title's Mortgage Lenders Policy (MLP) for commercial
lenders accelerates the settlement of commercial loans
and provides protection for lenders throughout Australia in a wide
range
of situations.
Time is of the
essence…
Commercial Lenders understandably have certain property title
requirements that must be met as a pre requisite for settlement.
However meeting those requirements is not always possible
and can result in either a delay in settlement or no settlement
at all.
Lenders and Originators in Australia are using First Title's
MLP to insure over various title requirements including for
e.g. survey, building, land tax or zoning certificates and a
number of property inquiries.
First Title's MLP can be issued within 24hrs of receiving
an order and incurs a one off premium at settlement. Using the
MLP can result in an ‘express settlement', benefiting
the originator and the lender and your customers.
Problems with title
and mortgage enforceability…
First Title's MLP also provides protection to a lender
where title defects are discovered, such as violations of covenants,
boundary issues or the presence of prescriptive easements.
First Title's MLP insures the lender against future loss for
such risks, which means settlement can go ahead in circumstances
where it might otherwise not.
Additional coverage includes protection against prior interests
being registered, as well as fraud and forgery.
First Title's MLP will save administration costs and
legal fees, advance settlement by weeks and provide the lender
with no fault insurance coverage to enhance risk management.
First Title's
Mortgage Lenders Policy is the
smart way to settle commercial loans.
Bundled Services
First Title has developed
a package of services that an owner or developer of residential
development land could use to streamline the acquisition, subdivision
and subsequent sale of new residential property.
This will
include:
-
title insurance for the owner of the development
land;
- title insured commercial loans for the developer;and
- title insurance policies for prospective purchasers of each sub-division
and their lenders.
The traditional, non-title insured process of settlement used
where consumers buy a subdivision for development or a newly
constructed home clearly contains many inefficiencies which
can be remedied via the involvement of First Title.
Title insurance
can facilitate significant cost savings and process enhancements
via some simple modifications to existing practices.
For example, cost savings can occur through elimination of
repetitive and unnecessary searches where an approval of title
(and off title) issues has taken place by a title insurer in
conjunction with a conveyancer and lenders. By this mechanism,
the consumer's lawyer need not concern themselves with
title issues. This is the most obvious example of wasteful
repetition in the current process. In New South Wales alone,
conveyancers subjectively make numerous different inquiries
of different authorities to check for adverse affectations
and at the moment, this due diligence will occur for every
plot on a subdivision on behalf of each purchase and their
lender. These inquiries can cost up to $1,000 per plot, but
on average cost $300.
In practice, this means that in a development of 100 units,
one insured title search and set of property inquiries could
be done by First Title and provided to the lawyers or conveyancers
representing the 100 buyers, thereby increasing efficiency
and avoiding a scenario where the same searches are done over
and over by each lawyer or conveyancer acting on behalf of
the homebuyer and their lender.
The process of settlement currently engaged in can be enhanced
simply via a title insured program where the beneficiary includes
the lender. By this mechanism, the lender is able to avoid
an attendance on settlement. The current ‘shopping pattern' of
consumers who are accustomed to engaging a lawyer or conveyancer
to complete the settlement need not change.
A bundle of legal services and title insurance will have
instant impact in streamlining subdivision sales and reducing
conveyancing costs. This bundle would contain title insurance,
a mortgage product and conveyancing services.
|
