FAQ
Who is Coronado Title Company
Coronado Title Company, Inc. is the largest independent title insurance agent in Cibola, locally owned and operated, and now in its 11th year of delivering quality title and closing services to our customers and representing the major title insurance underwriter companies in the country.
We provide our customers with insurance coverage for one of the most important investments you will ever make and assist you in successfully completing the sale/purchase/financing of that investment through our closing/escrow services.
Our services are delivered with and our business is built on integrity, responsibility and excellence, and a commitment to "Customer Satisfaction" by those individuals who work for Coronado Title Company.
What does Coronado Title Company do
We issue title insurance commitments, policies, and endorsements for our underwriter companies in accordance with the Rules of the New Mexico Insurance Department in Cibola County.
We provide real estate transaction closing and escrow services in which we act as a neutral third party in facilitating the proper closing of the transaction in accordance with the wishes and directions of the parties. This includes the supervision, preparation, execution and recording of necessary documents, preparation of settlement statements between the parties, and disbursement of funds to appropriate parties.
We provide property information and title search services for lawyers, realtors, engineers, surveyors, and lenders, including foreclosure reports, title reports, environmental searches, listing packages, and the like.
Why use Coronado Title Company
The title insurance business in New Mexico is closely regulated by the New Mexico Insurance Department. As a result, all title insurance policy, commitment and endorsement forms and premiums to be charged for them are mandated by the Department and are the same for all title companies in New Mexico. Fees charged by title companies for closing and escrow services are not regulated, and can therefore vary from company to company. However, competition being what it is, closing and escrow fees charged by the different title companies in Cibola County are virtually the same.
Consequently, it is our Vision, commitment to our Mission and our years of experience which separates us from our competition -- providing you, our customer, with perfectly outrageous service with professionalism, integrity, and creativity.
Come try us! You'll like us!
What is Title Insurance
Title Insurance is a contract between the Insured and the title insurance company. Under the terms of the contract the insured agrees to pay a premium and the title insurance company agrees to defend the title and/or pay losses the insured may suffer if the title to the Insured's property is challenged or defective.
Is Title Insurance like other Insurance
No. Title Insurance insures against events which happened in the past that affect title to the property. Other types of insurance protect against events in the future. Specifically, Title Insurance protects the Insured against loss resulting from previously unreported land title defects insured against, such as forgeries, claims by missing heirs, recording errors, etc.
Also, should a claim against the title to property require legal defense, the title insurance company will work with the Insured to provide for the legal defense of the title and to pay the cost of the defense, even if the costs exceed the face amount of the policy. This is true regardless of how many claims are brought during the life of the policy.
Property/casualty insurance protects the property owner against future events which might adversely affect the value of your property, such as fires, floods, etc. It is written for a fixed term for which the company receives a stated premium. At the end of this period, premiums are due again and may increase or decrease in line with the company's loss experience.
On the other hand, for a title insurance policy, only a one-time premium is charged for the risks that are assumed and carried over the years during the lifetime of the Insured.
What different Types of Title Insurance Policies are available
No. The most often requested policies are:
Owners Title Policy - Protects the owners of the property while they are the owners and even after the property is sold.
Mortgagee Title Policy - Protects the lender's invested capital from loss if it is determined that its mortgage lien is not valid or is inferior to another lien not shown as an exception to coverage on its policy. Also referred to as a Lender's Policy
What is the amount of Policy Coverage
Owners Title Policy - The policy will be issued in the amount of the current sales price. If there is no sale, the policy must be issued for the fair market value of the property.
Mortgagee Title Policy - The policy, whether regular or construction, will be issued in an amount equal to the current outstanding loan balance, or the fair market value of the property if the loan is secured by other collateral.
How does a title underwriter determine how to insure Property
Before issuing a title policy a search is made of county real property records and certain court records. This search is done using a title plant which maintains references to deeds, mortgages, liens, deaths, divorces, etc. which might affect the property. These instruments are examined by the title insurance company or its agent.
The results of the examination determine whether the title insurance company will issue a policy and what exceptions to coverage will be taken in the policy. The search and the commitment are not representations as to title but are done for title insuring purposes only.
Can I ensure any Type of Property
No. Title Insurance is not intended for titles known to be bad or defective.
Can a Defective Title be Cured
Sometimes. Depending on the nature of the title defects, they may be corrected with the assistance of an attorney of the seller's choice.
Correction methods include affidavits, correction deeds and other documents. Court action may be necessary.
Many times the commitment for title insurance will list what items or actions would be necessary to remove the matter in question as an exception to coverage.
The title insurance company does not cure bad titles or write legal papers. Documents required by the title company are not meant to cure a title defect. They are required to satisfy the title insurance company that the property is insurable.
Why do I need Title Insurance
To protect possibly the most important investment you'll ever make -- the investment in real estate. Without it, you become a self-insurer. No other property has a useful life that compares with the life of land. Owners die, new ones succeed, but land goes on forever. Owners of goods may change their location at will, but land is immovable. Being both permanent and immovable, it lends itself to the absorption of innumerable rights. Over the ages, this so impressed lawyers and jurists that they formed a separate body of law for land. These laws, creating many types of rights in land, are so numerous and so complex it is impossible for there to be a mathematical certainty of ownership.
Many title problems can arise to cause the complete or partial loss of your investment, and even the most careful search of the public records by experienced title examiners may not find every title problem. Because some problems are hidden, your title may appear to be perfect but in fact there may be a problem that is a land mine waiting to explode. Such a problem is known as a title defect. A title defect is anything in the entire history of ownership of a piece of real estate which may encumber the owner's right to the "peaceful enjoyment" of the property or which may cause the owner to lose any portion of the property.
To give you an idea of the types of title problems that may occur, we have compiled this list of title defects that could result in partial or complete loss of your property or an expensive lawsuit:
- Documents executed under duress
- Defective acknowledgements
- Deeds by minors
- Inadequate legal descriptions
- Easements established through continued use but not discovered by a survey or in the public record
- Mistakes in recording legal documents
- Mistaken reports furnished from taxing authorities
- Misinterpretation of wills
- Deed of community property recited to be separate property
- Errors in tax records
- Birth or adoption of children after date of will
- Falsification of Records
- Undisclosed or missing heirs
- Errors in indexing of legal documents by the County
- Surviving children omitted from a will
- Deeds to or from defunct corporations
- Marital rights of spouse allegedly, but not legally, divorced
- Instruments executed under fabricated or expired powers of attorney
- Forged deeds, releases, wills, etc.
- Deeds by persons supposedly single but secretly married
- Deeds from persons not competent to handle their affairs
- False Impersonations
- Fraud
THE LOAN POLICY DOES NOT PROTECT THE BORROWER
A lender goes to great lengths to minimize the risk of lending money for the purchase of real estate. First, credit is checked as an indication of the borrower's ability to repay the loan.
Then, the lender seeks assurance that the quality of the title to the property to be acquired and which will be pledged as security for the loan is satisfactory. The lender does this by obtaining a Mortgage Title Policy. The Mortgage Policy protects the lender against loss due to unknown title defects. It also protects the lender's interest from certain matters which may exist, but may not be known at the time of lending.
But, this policy only protects the lender's interest. It does not protect the buyer-borrower. That is why a real estate purchaser needs an Owner's Policy, which can be issued at the same time as the Mortgage Policy, usually for a nominal one-time fee.
An Owner's Title Policy will pay for defending against any future lawsuit attacking the title of the Insured and will either clear up title problems or pay the Insured's losses, all for a one-time premium. An Owner's Title Policy remains in effect as long as the insured, or the insured's heirs, retain an interest in the property, or have any obligations under warranty in any conveyance of it. An Owner's Title Policy, issues simultaneously with a Mortgage Policy, is the best title insurance value a property owner can get.
What does title insurance cost
Uniform premiums are established each year by the New Mexico Insurance Department for every title policy issued in New Mexico. In 2005, for example, the basic premium for an Owner's Policy of $100,000 is $807.00 and $400,000 was $2247.00. Regular Mortgage Policy rates are 90% of the Owner's Policy rates, but Construction Loan rates are only $1.00 per $1000.00 of coverage.
As result of the issuance of prior title policies or the simultaneous issue of policies in a single transaction, credits or discounts may be available to reduce actual premium costs. The most common one is the simultaneous issue of Owner's and Mortgage Title Policies where the buyer of the property is financing the purchase with a lender who requires a Mortgage Policy. If you (or your seller) purchase an Owner's Title Policy in an amount equal to the purchase price, the premium for the Mortgage Title Policy is only $30.00.
For calculating 2005 basic premiums for owner's policies, please refer to the Rate Table.
Remember, the Owner's Policy premium is charged only once -- at the time of purchase of your property, for coverage that can last a lifetime!
In addition to the above premium for a policy, there is a charge of $50.00 for each Commitment issued and charges for endorsements issued as described below.
An Owner's Policy will protect you against certain risks existing as of the date of the policy, such as liens, encumbrances and title defects, unless these risks are excepted from coverage as shown in SCHEDULE B-2 of your Commitment. The New Mexico Insurance Department has prepared the "NOTICE TO PROPOSED INSURED" to describe to you the additional coverages available in your owner's title policy. The following explanation of the pre-printed Exceptions 1-7 in SCHEDULE B-2 is intended to supplement the "NOTICE TO PROPSED INSURED" on how these Exceptions may be deleted/removed as exceptions to your policy coverage. These printed Exceptions are matters outside our search of the public records, and therefore special requirements need to be met in order to delete them and provide you with the additional/extended coverage.
Standard Exception 1 concerns protection against squatters, tenants, or others that may be in physical possession of your property. Exception 1 can be deleted from your policy (and the coverage added) with an affidavit from your sellers that they have sole possession of the property as a single family residence. There is no premium charge for this additional coverage.
Standard Exception 2 concerns protection against the unrecorded rights of one person to use the property of another (unrecorded easement). These usually consist of travel ways across the property, which have been continuously used by non-owners and/or of utility lines which cross the property.
A surveyor must inspect your property to see if such easement rights exist and produce a survey showing any. Any such easement rights disclosed by the survey will be added as specific exceptions to your policy. Exception 2 can then be deleted from your policy at no premium charge to provide you with coverage against any other unrecorded easements not shown in the survey. Survey costs will have to be paid.
Standard Exception 3 concerns survey protection primarily against the encroachment of structures, fences, walls, and the like onto easements located on the property or onto neighboring properties or streets, or onto your property from neighboring properties, and boundary line conflicts.
Again, a surveyor must inspect your property to see if any of these exist, and produce a survey showing any. Any encroachments or conflicts disclosed by the survey will be added as specific exemptions to your policy. Exemption 3 can then be deleted from your policy to provide you with coverage against any other encroachments and conflicts not shown on the survey. There is an additional premium charge for the coverage of 15% of your Owner's Policy premium, plus survey costs.
Standard Exception 4 Concerns protection against mechanic liens filed against your property after your closing and the date of your owner's title policy. State law permits unpaid contractors, subcontractors and material men to file liens on your property up to 90 to 120 days after their work is finished. These deadlines could occur after you have purchased the property, and you may have to pay the claimant if the sellers do not. We will require at lease an affidavit from your sellers that the 120-day lien period in all cases has expired. Exception 4 can then be deleted for an additional premium charge of $3.00 per $1000.00 of your Owner's Policy amount. If you are purchasing a newly completed home, this lien coverage may be desirable.
Standard Exception 5 concerns community property rights of your spouse, and can only be deleted (at no premium charge) if title is going to held by some entity other than a natural person.
Standard Exception 6 concerns the existence of navigable streams, arroyos or lakes on your property as shown on the survey. Any such waterways disclosed by the survey will be added as specific exception to your policy. Exception 6 can then be deleted for an additional premium charge of $32.00. Survey costs will have to be paid.
Standard Exception 7 concerns primarily the existence of mining claims, patent reservations and water rights on your property. This exception 7 can be modified to delete everything except "water rights, claims or title to water", particularly if your property is located in a platted subdivision, for an additional premium charge of $32.00.
We hope the above explanations are helpful to you in answering such questions as "do I need the extra coverage?" and "is the extra coverage worth the cost?" Only you can answer these questions, but do keep in mind that premiums for these policy coverages are only paid once and you are covered by your policy for life.
What is Escrow
An escrow is an arrangement in which a disinterested third party holds legal documents and funds on behalf of a buyer and seller and distributes them according to the buyers' and sellers' instructions.
People buying and selling real estate often open an escrow for their protection and convenience. The escrow holder is relied upon to faithfully carry out their mutual instructions relating to the transaction and to advise them if any of their instructions are not mutually consistent or cannot be carried out.
An escrow is convenient for the buyer and seller because both can move forward separately but simultaneously in providing inspections, reports, loan commitments, funds, deeds, and many other items, using the escrow holder as the central depositing point. If the instructions from all parties to an escrow are clearly drafted, fully detailed and mutually consistent, the escrow holder can take many actions on their behalf without further consultation. This saves much time and facilitates the closing of the transaction
