Title Tuesday: Title Commitment vs. Title Policy

At Advocus Title, we understand how important it is for you and your borrowers to have a clear understanding of the title insurance process. Two of the most common terms that you will see in the closing process are the title commitment and the title policy. Below, we have explained the key difference between the two documents and the ways that they work together to ensure your property is covered from future title claims.

What is a title commitment?

The title commitment (also known as the preliminary title report) is the title company’s promise to issue a title insurance policy on the property after closing. The commitment is created from a title search consisting of a thorough review of all public records related to the property to determine if it is free and clear of potential claims, if any restrictions or allowances are imposed on the property, or if any liens exist on the property that requires payoff at closing.

If any liens or encumbrances are discovered during the title search, they will be listed as exceptions on Schedule B-II of the title commitment and indicate areas that will be excluded from the resulting title insurance coverage, meaning that any claims resulting from these known issues will not be covered. To ensure Guaranteed Rate’s first lien position, the Advocus Title clearance team partners with GR and the borrower to acquire all necessary documentation needed in order to clear title prior to closing. After obtaining the necessary documentation, a new title commitment can be subsequently reissued with the exceptions removed.

What is a title policy?

The title policy provides coverage according to the terms set forth in the title commitment. If the policy owner (owner or lender) agrees to the terms, they can decide to move forward with purchasing title insurance as outlined in the commitment. After closing, the title policy will be issued, and coverage will commence.

At Advocus Title, we are committed to providing you and your borrower with a smooth and efficient title experience. If you have any questions about how we prepare title commitments and title policies at Advocus Title, please reach out to our title team via formemail, or phone.

Title Term of the Week: Cloud on Title

An irregularity, possible claim, or encumbrance which, if valid, would adversely affect or impair the title. 

Faster Closings with Faster Turntimes

At Advocus Title, we know that you want to provide your borrower with the fastest closing experience in the market. That’s why we are committed to reducing our turntimes throughout 2021 to provide you with best-in-class speed to close. To provide transparency and allow you to best manage your closing process, we publish our state-by-state turntimes to an initial title commitment on the GR Intranet. Check out the latest to see how Advocus Title can help improve your speed to close.

Need Help?

The Advocus Title team is committed to providing you with the best title experience in the industry, and if anything goes wrong, to provide you a quick and clear path of escalation and issue resolution. 

Connect with Advocus Title Customer Support via formemail, or phone.