Commercial Lenders: Three Easy (No Cost) Ways to Enhance Your Title Coverage

Rebecca Sherwood

By Rebecca Sherwood

Tuesday, June 11, 2019

Some say there’s no such thing as getting something for nothing, but that’s not necessarily true when it comes to lender’s title insurance in Oklahoma. Here are three good ways to enhance the lender’s coverage for NO COST and with NO DELAY in the closing process.

1.      Mechanic’s Lien Coverage. Be sure to obtain this important coverage, which in general terms, insures that a lender’s mortgage enjoys priority over any unfiled mechanic’s liens. Except in situations involving recent or pending construction, most title insurers in Oklahoma are willing to issue a loan policy with mechanic’s lien coverage based on (a) a title search showing the absence of filed mechanic’s liens together with (b) an affidavit from the borrower stating that there has been no recent work for which payment has not been made. This enhanced coverage is typically available for a lender at no additional charge. 

2.      Survey Coverage. Be sure to ask for survey coverage—even without a survey! Survey coverage protects a lender against encroachments and others matters which might be disclosed by an accurate land survey. In today’s marketplace, some national title insurers will allow survey coverage on a lender’s title policy, up to varying liability amounts, with no survey whatsoever. This enhanced coverage is typically available for a lender at no additional charge. 

3.      Gap Coverage. In Oklahoma, because of the time required to post filings once documents have been submitted to the recorder’s office, it’s not possible to search land records for the period immediately prior to closing. This results in a “gap” of a few days or sometimes a couple of weeks where it is not possible to ascertain whether any documents have been filed since the date of the last title search. A lender who intends to obtain a first lien mortgage will be extremely disappointed, to say the least, to learn after closing that an intervening lien has been filed in this “gap” period. If asked to do so, most title insurers in Oklahoma will insure against damages suffered by a lender as a result of a filing in the “gap” period. This enhanced coverage is typically available for a lender at no additional charge.

These enhanced coverages significantly increase the protection offered by lender’s title insurance. Let us know how we can be of assistance to you.