Definitions

Definitions

Updated 02/25/08

Certified Funds / Good Funds / Cashiers Check

Closing / Settlement

Declaration Page

Document Preparation

HUD Settlement Statement

Identification

Mortgagee Clause

Owner's Title Insurance

Overnight Courier

Power of Attorney

Quit Claim Deed

Subordination Agreement

Warranty Deed

Certified Funds/Good Funds: September 2005 Tennessee Legislature passed the "Residential Closing Funds Distribution Act of 2005" otherwise referred to as the Good Funds Act restricting the type of incoming funds title companies can accept on real estate transactions. Therefore, we require a cashiers check payable to Acquire Title, Inc. or wired funds at closing and cannot accept escrow checks from other title companies. Please click here to review the Good Funds Act.

Closing / Settlement: This is the process in which all parties sign applicable docs to finalize the transaction and funds are disbursed. Prior to disbursing any monies, all requirements by Federal Regulations, HUD, RESPA, Tennessee State Law, Lending Institutions, Title Insurance Underwriters, etc. must be fully satisfied.

Declarations Page: This is written proof of coverage provided by your homeowner's insurance agent. We are required to forward this documentation to your lender so they may complete the pre-closing process. Without it we cannot receive instructions for closing or a closing package.

Back To Top

Document Preparation: This is a charge that covers our preparation of all documents used in the process of a closing. We receive, organize and complete documents for all parties involved. Any pertinent documents prepared by another party are subject to review and approval by our insurance underwriters prior to closing.

HUD Settlement Statement: This document is one of the most important documents you will execute regarding your transaction. All charges involving all parties must be explicitly outlined on the HUD Settlement Statement. Failure to follow these guidelines could be fraudulent. The lender bases their approval of a loan on income, debt, assets, credit scores, etc. Proceeds from sale transaction may be subject to IRS taxation. Most real estate agents are required to submit a copy of this statement to their accounting offices with respect to their compensation. * Click here for an example and an explanation of the HUD Settlement Statement.

Identification: We are required to obtain copies of at least one valid photo identification due to ensure the identity of the person executing documents.


Mortgagee Clause: The lenders address that we will provide to the hazard insurance company for their policy purposes.

Owner's Title Insurance: The premium for owner's title insurance is calculated upon the sales price (or loan amount if higher than sales price). Title searches are valid for a short period of time, therefore you have 30 days after closing to purchase owner's title insurance at the rate provided on the Notice and Waiver. After 30 days, a new title search must be completed and the full premium would be due. See this article for details explaining about owner's title insurance:; http://homebuying.about.com/od/homeshopping/qt/TitleInsurance.htm

Overnight Courier: This is an expense our office incurs when we are required to ship overnight documents. Per title underwriting and lender underwriter guidelines, we are required to ship closing packages, payoff disbursements, legal documents, closing proceeds, etc. via overnight delivery for tracking and delivery confirmation purposes.

Power of Attorney: This document allows a person to appoint someone to execute documents on their behalf. A Power of Attorney must be approved by both the title company's underwriter and the lender's underwriter. Typically, only a Specific (or Limited) Power of Attorney will be allowed and can only be used for the specific purpose of the transaction. We highly suggest that you do not use a Power of Attorney unless it is absolutely necessary. For sellers that are using a Power of Attorney, we will provide as many closing documents as possible to be executed along with the POA.

Quit Claim Deed: This is the legal document that the current owner signs and is generally used to add someone to title (a newly married couple), remove a person from title (per Final Decree of Divorce) or transfer property between family members. Tax is not paid on this type of transaction at the Registers Office.

Subordination Agreement: This document is executed by a current lien holder who agrees to maintain or change their position, or place in line, so to speak, in which their loan is secured. Liens recorded first take priority over liens recorded at a later date. In the event of a foreclosure, the lien holder in "first" position will have the opportunity to receive compensation first. Second position has the next opportunity to receive compensation from any equity remaining, and so on. For each loan that is paid off, the other lien holders move up in position. A Subordination Agreement means the lienholder has agreed to give another lienholder their position in the event of a foreclosure.

Warranty Deed: This is the legal document the current owner signs to convey title. A Warranty Deed will place the title to the property into the name of the new owner's and is subject to tax on the sales price at the Register's Office.

This site was last updated 02/25/08