real estate finance - full book (500 pgs)

It is important because some lenders have different

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Unformatted text preview: buildings, and anything unusual that does not sell routinely in the marketplace. The use of a gross income multiplier is seldom used in appraising a single–family property, because typical buyers do not buy them for income purposes. Next, the appraiser analyzes the data used in the report for completeness and reliability. The final step is to arrive at market value. Again, this is not an averaging process, but one in which the appraiser evaluates each approach, then selects a single estimate of value. TITLE INSURANCE A preliminary title report is a report on the condition of title prepared in anticipation of closing and prior to issuance of a title insurance policy. Who Owns What – A lender accepting a security interest in real property has to be certain that the borrower has and can convey to the lender an insurable interest in the property. Lender's Coverage Required – A lender's title requirements include protection against any problems that affect the value of the loan security. TYPES OF POLICIES There are two types of title insurance policies: the standard policy and the extended policy. STANDARD TITLE POLICY (CLTA) The “standard” policy is the most widely used, and generally: Insures the owner for the amount of the purchase price. Insures the lender for the amount of the loan. Dynasty School (www.dynastySchool.com) 12-19 REAL ESTATE FINANCE Standard policy is frequently referred to as a CLTA (acronym for California Land Title Association), a state trade association for title insurance companies. This standard policy insures the lender only unless the owner requests and pays for owner coverage. This policy protects against: 1. Matters of public record. Acknowledged documents are recorded in the county where the property is located. Sources for searching for documents are city, county, state and federal, i.e.,: Federal land offices. State of California Secretary of State. Taxing authorities. Special assessment districts. County Clerk’s Office. Anyone having an i...
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