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The Construction Lending Podcast

Title Research and Lien Impact



Episode 13

Get ready for an insightful episode that will take you through the world of title research. Join us as we chat with Dave Mitchell from AFX Research – a leading title research company. Together, we’ll discuss the layers of property liens and the impact of historical recording processes. Dave’s insights will help us navigate the operational challenges that title research presents, and we’ll discover the fascinating intricacies of the research process. We’ll also learn about the herculean effort required to modernize historical and county-specific land records. With title research being key in construction lending, this episode is a perfect blend of technical expertise and personal anecdotes to uncover how lenders can protect their interests despite legal changes.

Questions Answered

  • What are the differences between title updates and endorsements, and why would title insurance companies prioritize one over the other?
  • What are some of the most common errors in recording property information, and how can they be avoided to ensure accuracy in land records?
  • How do you identify contractors’ liens and deal with these issues during title research?
  • What are the challenges when conducting title research nationwide, considering the different recording processes and laws across various counties?
  • How are land records organized, and what implications does this have for title researchers searching for property-related documents?

Episode Recap

Navigating the Maze of Title Research and Its Impacts

In the intricate web of property ownership and real estate transactions, title research is a pivotal yet often-underestimated aspect of the process. On this episode of The Construction Lending Podcast, we welcome Dave Mitchell of AFX to cover the complex world of title research and the reverberating effects of legislative changes.

The Crucial Role of Title Research in Real Estate: Understanding the Basics

Title research is the silent backbone of real estate transactions. It ensures that when a property changes hands, the buyer receives a clear title free of legal encumbrances. Tasked with eliminating potential liens and safeguarding transactions, title researchers like Dave Mitchell perform this meticulous job, navigating an outdated and diverse system of records. Each phase is critical, with quality control checks ensuring the final report’s accuracy and comprehensiveness.

One of the basic yet common errors in recording property information is the improper documentation of the owner’s name. As Dave emphasizes, even something seemingly insignificant, such as a missing middle initial can lead to mix-ups in a populous area, affecting the clarity and legality of property titles.

Liens can arise during the construction lending process, whether federal and state tax liens or mechanics’ liens for unpaid work. Accurate borrower information becomes paramount in these cases, and title researchers go to great lengths to sift through the data and provide thorough reports on any negative findings.

Title research varies not only based on the property owner’s history but also on the jurisdiction where the property is located. With different recording processes across counties and ever-changing legal landscapes, companies like AFX must adopt flexible and comprehensive strategies to conduct their research efficiently.

Searching Through History

Dave outlines the methodical process of reviewing mortgages, taxes, liens, and any judgments from the moment the current owner purchased the property to the present. This historical approach helps provide a full picture of the property’s status.

The methods used in title research may sometimes feel like a relic of the past. While some research still requires manual searching through record books or sending faxes, Dave urges the modernization of this system despite deep-rooted practices and county-specific regulations.

Accurate research is not only about eliminating errors—it’s about ensuring the integrity of the property transaction. Discrepancies in records, particularly owner names, can lead to costly oversights. The meticulous nature of this task demonstrates the need for experts in the field, who can navigate such complexities with precision.

Legislation Causing Ripples

The passage and implementation of Daniel’s Law in New Jersey is a poignant example of how changes in legislation can shake the bedrock of title research. Daniel’s Law aims to protect personal information of public figures and their families, but as unintended consequences unfold—such as the withdrawal of online records and elongated title research turn times—the law underlines the delicate balance between privacy and practicality in this industry.

For construction lenders, the increased turn times for title updates introduced by Daniel’s Law represent more than just a hiccup in their workflow. It directly impacts their capacity to distribute funds and maintain the security of their first lien priorities. In an industry where time is money, such delays can equate to significant financial setbacks.

The Future of Title Research

The conversation concludes with a glimpse of Dave’s forecast about the industry’s future with the adaptation of technology to expedite and fortify the accuracy of title research. This episode brings to light the multifaceted challenges and considerations within the title research landscape. As the sector continues to evolve, particularly in the face of legislative changes, staying informed is paramount. The landscape of title research may be fraught with challenges, but with expert advice, the path to clear property titles becomes a little less daunting.

Tune into the full episode for in-depth discussions and fresh insights from industry experts.

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