RECENT CHANGES TO TITLE INSURANCE FORMS AND RATES

(Reprinted with permission from Bruce E. Cweiber, President of Precision Title Agency, Inc.)

The Ohio Title Insurance Rating Bureau has approved the following ALTA forms and rates for use in Ohio, effective May 1, 2013:

Closing Protection Coverage

This coverage, which is limited to a specific transaction, provides the covered party with certain protection as set forth in Form CP-24 against fraud, misapplication of funds or failure to comply with written closing instructions by the Licensed Agent (an agent licensed and authorized to issue title insurance in the State of Ohio for the Company) subject to the provisions contained therein. The Rate for the issuance of this coverage shall be: forty dollars ($40.00) for a lender, its successors and assigns, as their interest may appear; fifty-five dollars ($55.00) for seller(s); twenty dollars ($20.00) for buyer(s)/borrower(s) and twenty dollars ($20.00) for each additional applicant for title insurance. The Minimum Premium is $40.00 and this Rate is remitted in its entirety to the Underwriter. The premium shall be earned when funds or documents are deposited with the Licensed Agent

Standard Mechanic’s Lien Exception

There is now a premium to delete the Standard Mechanic Lien Exception in the following instances in Ohio:

Loan Policies

The Ohio Title Insurance Rating Bureau has filed a rate filing with the Ohio Department of Insurance which becomes effective on December 1, 2012. The rate provides when a Loan Policy is issued insuring a mortgage, and there is a risk of loss of priority to mechanics’ lien claimants, i.e., work started prior to recording, and the standard general exception for mechanics’ liens is to be deleted, the premium shall be 40% of the Original Rate for Loan Policies as set forth in PR-8 and is in addition to the policy premium. The minimum charge to delete the standard general exception for mechanics’ liens when there is a risk of loss of priority is $500.00. The Company will continue to require the necessary documentation to underwrite this risk and determine if the risk is insurable.

There is no charge to delete the standard mechanic’s lien exception on a loan policy if there is no known mechanic’s lien risk.

 Owner’s Policy

When mechanics' lien coverage is provided in an Owner's Policy, whether within the express insuring provisions of the Policy issued or by the absence or deletion of the general exception for mechanics' liens:

a). Where the risk of loss due to mechanics' lien claims cannot be determined, the premium for such coverage shall be ten percent (10%) of the Original Rate for such Owner's policy and is in addition to the Policy premium. The minimum premium in such circumstance shall be $250.00.

b). When there is a risk of loss due to mechanics' lien claims, the premium shall be forty percent (40%) of the Original Rate for such Owner's policy and is in addition to the Policy premium. The minimum premium shall be $500.00.

Commercial Participation Interest (ALTA Form 30.1-06)

This endorsement, subject to the exclusions contained in the endorsement and the Exclusions, Exceptions and Conditions contained in the Policy, insures against loss or damage sustained by the Insured by reason of: (a) the invalidity or unenforceability of the lien of the Insured Mortgage resulting from the provisions in the Insured Mortgage or the Loan Documents which provide for Participation Interest, and (b) lack of priority of the lien of the Insured Mortgage at Date of Policy as security for the unpaid principal balance of the loan and the interest on the loan, including the Participation Interest, if any, which lack of priority is caused by the provisions in the Loan Documents for payment or allocation to the Insured of any Participation Interest.

The rate for this endorsement is ten percent (10%) of the Original Rate for the Loan Policy for the policy to which it is attached and is in addition to the policy premium. The minimum rate for this endorsement is $250.00.

 

Founded in 1996, Precision Title Agency Inc. is a leading commercial and residential real estate title and escrow agency serving Ohio and surrounding states.  Mr. Cweiber, president of Precision Title Agency Inc. is a respected real estate attorney, licensed insurance agent and civic leader in Cleveland's business and professional communities. Mr. Cweiber can be reached at   bec@precisiontitle.com  if you have any questions regarding this article, or the title services provided by Precision Title Agency Inc.