Title Commitments
In addition to the regular preprinted ALTA Commitment 1982 (ORT Forms 3538-3541 inclusive) the Company has filed and has available
for use in most states an Electronic Commitment (ORT Form 3607). The electronic commitment is designed to be printed entirely by computer
printer. It incorporates by reference the entire terms and conditions of the ALTA Commitment 1982 (or related commitments listed therein
for certain named states). Except for a statement of incorporation, the text is essentially a Schedule A and B with information entered
relative to the particular risk. Because of the incorporation by reference, no jacket or other preprinted sheets need be used. In every
case when used, the wording should be precisely as on the sample included in this manual, and the form number (ORT Form 3607) should
always be printed on the commitment.
PLEASE NOTE: When an Electronic Commitment is issued to a lender and an owner's policy is also to
be issued, the owner must receive a regular commitment jacket. Incorporation by reference alone is not acceptable for an owner to be
insured.
Agents sometimes ask if they can issue title commitments or preliminary reports to customers who do not desire to have a
policy of title insurance but would like to be furnished with a commitment and at a reduced rate. A title commitment cannot be issued
in any case unless it is contemplated that a final title policy will be issued upon the closing of the transaction. If you have customers
who make it a practice to order title commitments and do not order final policies, they should be advised that such practice cannot be
continued. We ask that you make every effort to see that final policies are issued in all cases and that the correct premium is collected.
WHEN ISSUED
If the attorney's opinion discloses that the party to be insured is not in title or the mortgage to be insured is not of record, the applicant will generally desire a title commitment. These commitments are intended to furnish protection until the transaction is closed and provide basic information about the title on which the insured may rely in closing the transaction.
EXPIRATION DATE
Our commitments (in most cases) are effective for six months. If the transaction will not be closed within that period of time, it may be extended for no more than an additional six months. Commitments must not be extended for longer than one year without approval of your supervisory office.
PRINTED EXCEPTIONS
It is important to note that certain exceptions appear as a part of the printed material in the title commitment. We direct your
attention particularly to those exceptions designated (a), (b), and (c) on Schedule B - Section II.
These are sometimes referred to as "Standard Exceptions."
It is important to note that these exceptions should not be waived on commitments or final policies without reading the separate topics of this manual concerning these exceptions.
Exceptions (a), (b), and (c) are preprinted exceptions in the final owner's policy. These do not usually appear as printed exceptions in the loan policy since they are not generally acceptable to investors. These exceptions must be typed into all final mortgage policies, unless you have acceptable evidence in your file to waive same. For detailed discussion of this subject, see the topics "Survey," "Possession Exception" and "Mechanic's Lien Coverage" elsewhere in this manual.
METHOD OF DATING COMMITMENT
The blank marked "Commitment Date" on Schedule A of the Commitment should be dated the same date as the date to which the title has been searched. It is not the date on which the commitment is prepared, or the date the attorney's opinion was written.
OWNER'S OR MORTGAGEE'S
Policies to be issued must be indicated. If not one of the preprinted ones, the correct form should be added. The Company's standard form of title commitment is used for both owner's and mortgagee's insurance. If an owner's policy is applied for, the amount of insurance requested and proposed insured owner are shown in the owner's section of the Policy or Policies to be issued. If a mortgage policy is to ultimately be written, the desired amount of insurance and proposed insured are shown under the same heading in the "Loan Policy" section. If only a loan policy is applied for, care should be taken not to complete the owner's section since we do not want to imply that a proposed owner has coverage unless an owner's policy is applied and paid for.
TITLE FINDINGS
The title finding in the commitment should be inserted in Schedule A exactly as it appears in the appropriate document or attorney's opinion, after the words "vested in." For suggested methods of setting out title findings when the title is in an estate or other unusual situations, contact your Supervisory Office.
DESCRIPTIONS
The description should be inserted in the appropriate place under Schedule A. This should be copied from the attorney's opinion. However, any reference to acreage in the tract should be omitted since this can impose a liability on the Company if there is a variance. A street address should never be included as a part of the description unless you are furnished with a survey or other proof showing that the street number and the legal description coincide. Care should be taken not to include, in the description to be insured, boiler plate language contained in deeds and mortgages referring to equipment, riparian rights, etc.
SCHEDULE B - SECTION I
Schedule B - Section I should include all requirements as to deeds needed to establish clear title, mortgages or other encumbrances required to be satisfied, and other items requiring action to be taken prior to closing. You will note that several requirements are preprinted.
SCHEDULE B - SECTION I
Schedule B should correctly reflect all those liens, encumbrances and objections to the title of the property covered by the commitment which will not be removed at closing and will appear on the final policy. While the examination of title preparatory to the issuance of the commitment comes from the record, personal knowledge of any problem not of record should also be raised.
=Every exception should contain a reference to the book and page and document number, if any; the parties to the instrument; and an abstracted explanation of the problem.
COMPLETION OF COMMITMENT
When the commitment is completed, it should be signed by you as Validating Officer and delivered to the applicant. The Agent's copy of all commitments issued will be kept in your permanent file on each case.
