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Buyer Information

IMPORTANT NOTICE ABOUT YOUR CLOSING (BUYERS/BORROWERS)

REPRESENTING THE INTERESTS OF THE BUYER IN REAL ESTATE TRANSACTIONS

WHAT YOU SHOULD KNOW ABOUT YOUR CLOSING (BUYERS/BORROWERS)

OUR FIRM’S PRIVACY POLICY NOTICE

WAYS TO HOLD TITLE IN MAINE

CLOSING ATTORNEYS AND THE CLOSING PROCESS - WHAT YOU SHOULD KNOW

TITLE INSURANCE AND ITS IMPORTANCE IN YOUR TRANSACTION


IMPORTANT NOTICE ABOUT YOUR CLOSING (BUYERS/BORROWERS)

As you may know, our office represents your lender in matters relating to your request for a mortgage loan in order to purchase real estate. We have commenced an examination of the title and have ordered necessary information to complete the closing.

When these matters are completed and reviewed by our staff we will notify you to arrange a time to close the loan. We will also advise you of any funds you may need to complete the transaction. You must bring CERTIFIED or BANK CASHIER’S CHECKS made payable to Douglas Title Company for these funds.  In addition, you must bring a valid drivers license or passport with you to closing for proper identification. We cannot close your transaction without this. Please do not forget as this is very important.

Please review the Lender’s commitment letter carefully.  If special conditions are required, they must be met to the satisfaction of the Lender PRIOR to closing. Also, please review the enclosed instructions and forms carefully with respect to other requirements that must be met prior to closing. Respond to each item applicable to your situation. Click HERE for directions to our offices as well more information regarding matters discussed in this letter. If you have any questions or comments relative to these matters please contact us.

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REPRESENTING THE INTERESTS OF THE BUYER IN REAL ESTATE TRANSACTIONS

If this is your first home purchase, the process may seem confusing. We hope that our office can make the entire purchase process easy and enjoyable for you. There are a few things to remember.

First, understand that the lender's closing attorney, and this includes our office if we are representing your new lender, represents the interests of the lender. Therefore, it is not the responsibility of lender's counsel to advise you on your rights and obligations regarding your new home purchase. Because of this we highly recommend that you retain your own attorney to represent your interests in this process. Our office can represent you, even if we are handling the closing for your new lender, for a reasonable fee and give you the comfort you need to proceed confidently toward the purchase of your new home. Some of the services we provide when representing buyers are:

  • Negotiation and preparation of the offer to purchase and purchase and sale agreement to protect your interests and concerns.
  • Resolve issues which may arise during the transaction.
  • Explain the mortgage process and assist you in understanding just what the lender’s commitment letter says.
  • Assist in the coordination of the closing and represent you at the closing, review all closing documents and explain their meaning and significance to you.
  • Answer questions you might have and resolve disputes that may arise at any time during the closing process.
Please call our office to discuss how we can represent you and what our fees are for this service. We look forward to hearing from you.

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WHAT YOU SHOULD KNOW ABOUT YOUR CLOSING (BUYERS/BORROWERS)

1. INSURANCE.  The homeowner's fire and extended coverage insurance policy or binder for such insurance must be either in an amount at least equal to the total of all new mortgages on the property or 100% of the replacement cost of all insurable buildings and other improvements on the land. IF YOU ARE GOING TO RELY ON THE 100% REPLACEMENT COST AMOUNT AS SUFFICIENT INSURANCE, THEN THE POLICY OR BINDER MUST STATE THAT 100% REPLACEMENT COST IS IN EFFECT. The insurance policy or binder must name all of the persons who will hold title to the property. The mortgage clause adding the mortgagee's insurable interest to all policies MUST BE WORDED in accordance with the instructions listed in your commitment letter issued by your Lender.

Your insurance agent should fax or deliver to our office a copy of a binder for such insurance along with a receipt showing that the first year's premium is paid in full or with the bill to be collected at closing, at least five (5) business days prior to closing. Please have them fax it to us at 207-846-3760 (Yarmouth office) or 207-622-0473 (Augusta office). Please provide Douglas Title Company with your homeowner's agent contact information so we can follow up if need be.

2. FLOOD INSURANCE.  If the premises is located within a specially designated federal flood hazard area then flood insurance is a mandatory requirement and you must provide a flood insurance policy together with a paid receipt for the full first year’s premium at or before the closing. Please note that if the premises is located within Zone B, flood insurance is not required.

3. RENT LOSS INSURANCE.  If this transaction involves a loan on investment premises or a 2-4 family dwelling then rent loss insurance may be required and an appropriate binder to that effect will be required at or prior to closing.  You should check with the Bank for applicability of rent loss insurance to your loan.

4. TITLE INSURANCE.  The lender requires that they be provided with a lender’s title insurance policy (loan policy) to protect their interest in your property up to the amount of the mortgage.  While the premium for the loan policy is included in your closing costs, it does not protect you.  Your ownership interests are insured only by an owner’s title insurance policy (owner’s policy).  While the lender’s coverage under the loan policy decreases as the mortgage is paid down and terminates when the final payment is made, your owner’s policy remains in effect for as long as you and your heirs own the property.  The owner’s policy is available for a one-time premium and at a discounted rate if purchased simultaneously with the loan policy at the time of closing.

The owner’s policy provides coverage for numerous matters which are not covered by the standard attorney’s certification of record title and which are not discoverable by searching the land records.  Typical examples of such matters include forged documents, the incapacity of a grantor, undisclosed or missing heirs, missing signatures, mistakes in recording, unknown creditors and problems involving access to the land.  The best owner’s policy now available is known as the Eagle policy, which provides additional protection for problems such as zoning and building permit violations, restrictive covenant violations, encroachments and defects in title.
For your information we enclose a copy of a brochure citing the reasons for our recommendation to purchase Owners Title Insurance. You may also visit our web site for a more detailed explanation of the need for and benefits of having an Owners Title Insurance Policy.

Because we believe that obtaining an Eagle Owners Title Insurance Policy is in your best interest we will plan to issue same and include the additional premium cost in the settlement figure you will bring to closing unless you advise us to the contrary.
 
5. CONDOMINIUM INSURANCE.  If the mortgage involves a condominium unit, we will require a Certificate of Insurance from the insurance carrier for the condominium naming you and the Association and identifying the unit you are purchasing.  The language naming the Bank must be in the form set forth in Paragraph 1 above.  Please note that you may be required to purchase additional insurance if the insurance company does not provide 100% replacement cost coverage.

6. OTHER CONDOMINIUM REQUIREMENTS: A Resale Certificate must be procured and sent to us prior to closing. The Resale Certificate is a statement issued by the Condominium Association stating that there are no unpaid common expenses or special assessments against the condominium unit, disclosing the effect of any right of first refusal or other restraint on the ability to sell the unit, and providing other basic information about the condominium unit and the management of the condominium, as required by Title 33 Maine Revised Statutes Annotated, Section 1604-108. The seller of a condominium unit is required to provide this certificate to a buyer prior to closing. You may also be required to provide a Certificate of Insurance for your Lender as proof of insurance for the condominium and the condominium unit. The Condominium Association can assist you with obtaining the appropriate certificate.

7. WATER AND SEWER.  You should ask the sellers to obtain a final reading of the water meter so that all outstanding water and sewer bills may be taken care of at the closing.  If you are purchasing a condominium unit, it is likely that water and sewer charges are included in the monthly condominium fee.  In that case, a final water and sewer bill is not required.    

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OUR FIRM’S PRIVACY POLICY NOTICE

This notice is provided to you pursuant to the Privacy of Consumer Financial Information Act and the Federal Trade Commission's implementing regulation there under, 16 CFR Part 313.

1.         We collect nonpublic personal information about you from the following sources: Information we receive from you on applications or other forms either directly from you or from lenders and their affiliates or agents;
           
2.         We do not disclose any nonpublic personal information about our clients, borrowers, or sellers to anyone, except as is necessary in the mortgage loan transaction as may be necessary to effectuate the transaction with the lender that you have requested; to prevent fraud or unauthorized transactions; as otherwise required or permitted by law.

3.         We restrict access to nonpublic personal information about you to those clients, lenders, third parties and employees who need to know that information to provide the requested settlement services to you.  We maintain physical, electronic, and procedural safeguards that comply with federal regulations to guard your nonpublic personal information.

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WAYS TO HOLD TITLE IN MAINE

THE FOLLOWING INFORMATION IS INTENDED ONLY TO GIVE A BRIEF DESCRIPTION OF THE THREE COMMON WAYS OF HOLDING TITLE AND IS NOT PROVIDED FOR THE PURPOSE OF ADVISING YOU HOW TO TAKE TITLE. IF FURTHER INFORMATION IS DESIRED ABOUT CREDITORS RIGHTS AGAINST THE TITLE, ADVANTAGES AND DISADVANTAGES WITH RESPECT TO ESTATE PLANNING AND OTHER PRACTICALITIES, YOU SHOULD SEEK LEGAL COUNSEL FROM YOUR ATTORNEY OR RETAIN AN ATTORNEY FOR ADVICE IN THESE MATTERS.

In order to properly prepare the mortgage documents we require information from you as to how you intend to take title to the real estate.

The three most common ways two or more persons may hold title to real estate are:
TENANTS IN COMMON,  JOINT TENANTS or as TENANTS BY THE ENTIRETY (tenants by the entirety is only available for married couples)

What Happens Upon Death

            1.         When title is held as Tenants in Common, it is necessary to probate the estate of the deceased before the real estate may be sold or mortgaged.  There is no right of survivorship and so the deceased persons interest in the property passes to his or her heirs and not to the other owner(s).

            2.         When the title is held a Joint Tenants or as Tenants by the Entirety, the title automatically passes to the surviving owner(s) without the necessity to probate the estate of the deceased.

            3.         In any case of death of an owner of real estate, whether Tenants in Common, Joint Tenants or Tenants by the Entirety, it may be necessary to procure a release of the estate tax or taxes which may, by statute, become a lien on the property.

Who has Control and Management

            1.         When title is held as Tenants in Common or Joint Tenants, the rents, control, management and possession of the property is in the owners equally, in the absence of an agreement to the contrary, but the individuals can divest themselves of their individual share in the property without the joining in with the others.

            2.         Under the provisions of M.G.L. c.209, section 1, when title is held as Tenants by the Entirety, (which is limited to husband and wife) rents, control, management and possession of property are in the owners equally.  Chapter 209 further provides: “...The interest of a debtor spouse in property held as tenants by the entirety shall not be subject to seizure or execution by a creditor of such debtor spouse so long as such property is the principal residence of the non-debtor spouse; provided, however, both spouses shall be liable jointly or severally for debts incurred on account of necessaries furnished to either spouse or to a member of their family…Neither the husband nor the wife can divest themselves of their interest in the property to anyone except to each other, so long as the marriage lasts, without the signature of both."

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CLOSING ATTORNEYS AND THE CLOSING PROCESS - WHAT YOU SHOULD KNOW

Your application to your Lender for a home mortgage loan leads you inevitably to the closing agent’s office. You undoubtedly have questions as to what the role of the closing agent is, what tasks the closing agent will perform and what will take place at the closing. First, understand that the closing agent represents the interests of the lender. If your loan is a standard secondary market type loan the loan transaction and loan documentation are uniform throughout the state.

It has always been our practice to be as helpful as we can to assist borrowers in the mortgage loan transaction. Sometimes issues arise regarding the record title to a property.  If there are title issues, problems in a sale transaction, or issues involving inaccuracies, we endeavor to keep the borrower informed of all relevant issues. When possible, we seek to resolve title issues and disputes, many times without any additional fees. This usually insures that the loan and, if applicable, the sale of the property being mortgaged, proceeds forward to close with the borrowers being satisfied with the result.

The closing fees quoted to you by your Lender include a variety of items. Those which involve our office include the following and are standard transactional items for representing the lender in residential loan transactions:

Legal Fee  -  Includes ordering and obtaining a title examination from title examiners at the Registry of Deeds, title review, obtaining tax information, loan document preparation, , communications with borrowers, sellers, broker, etc., conducting the closing, final rundown of title, recording of documents, payoff of  liens, and other matters relating to the loan closing.                    

Title Abstract  -  Includes the physical review of the title to your property in the Registry of Deeds and Probate, including bankruptcy and tax matters where available.

Mortgage Survey Plan  -  Sometimes referred to as a plot plan, this is a tape measure survey of the land to be mortgaged in order to determine that it was not in violation of zoning when constructed and that no buildings or improvements encroach upon the property or over its lot lines. We may not have been instructed by your lender to order such a plan for this transaction. However, we do recommend that one be obtained in a purchase transaction and in such instances we will obtain one in any event for your protection. In a Condominium transaction we will generally not obtain such a plan.

Title Insurance  -  The lender requires a loan policy of title insurance for the loan amount in order to protect their interests from issues relating to the title to the property that could not be determined from an examination of the record of the title. In a purchase transaction, an owners policy can be purchased at a discount if purchased at the same time as the loan policy.  Owners title insurance is highly recommended by our office. We can supply you with information regarding this insurance and the cost.

Recording Costs/Courier/ & Certified Copy Fees  -  These include the cost to safely deliver the mortgage payoff and loan documentation to record the mortgage and other transactional documents, and obtain Registry certified copies that may be required in certain transactions.

This is a list of some of the items that you may be asked to pay for in a normal residential loan transaction. This explanation should serve as a brief overview of the items described above. For a further explanation please contact our office. We look forward to seeing you at your closing.

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TITLE INSURANCE AND ITS IMPORTANCE IN YOUR TRANSACTION

What is title insurance?
It is an insurance policy that protects the insured against loss should the condition of title to the land be other than as insured. Unlike other types of insurance that offer protection against future possible occurrences, title insurance offers protection against past occurrences which could result in a claim at a future date. Coverage continues in effect for so long as you have an interest in the covered property. If you should die, the coverage automatically continues for the benefit of your heirs. If you sell your property, giving warranties of title to your buyer, your coverage continues. Likewise, if a buyer gives you a mortgage to finance a purchase of covered property from you, your coverage continues to protect your security interest in the property. Title insurance provides the insured with "peace of mind" in knowing that you are receiving good and marketable title to the real estate you are purchasing.

Why do I need title insurance?
When you buy a home — or any property for that matter — you expect to enjoy certain benefits from ownership...to be able to occupy and use the property as you wish, to be free from debts or obligations not created or agreed to by you, and to be able to freely sell or pledge your property as security for a loan. Title insurance is designed to cover these rights. Without an owner's title insurance policy, you may not be fully protected against errors in the public records, hidden defects not disclosed by the public records, or mistakes made during the examination of the title of your new property. As a result, you may be held fully accountable for any liens, judgments or claims brought against your new property. However, your owner's title policy ensures that if such an occasion arises, you will be defended, free of charge against all covered claims and paid up to the amount of the policy to settle valid claims.

A buyer purchasing real estate is offered the opportunity to purchase an owner's policy of title insurance by the settlement agent, attorney, or title agent conducting the real estate closing.

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45 Forest Falls Drive | Yarmouth, ME 04096 | Tel: 207-846-3460 | Fax: 207-846-3760 | douglastitle@douglastitle.com
45 Melville Street | Augusta, ME 04332 | Tel: 207-622-0471 | Fax: 207-622-0473 | mary@douglastitle.com