Whenever a Texas homeowner initiates the process of either selling or refinancing their home, a title company will conduct a very important search to establish the proper chain of home ownership.
At times, during this process, the title company will discover that a reconveyance (a word which just means that you have been released from mortgage debt) is missing.
And in the process of further discovery, the title company determines that the holder of that note cannot be found; and therefore, the current status of that note cannot be conclusively determined. Sometimes, for example, the company which originally provided you the note may be out of business, or the reconveyance of the note has been lost or subsumed by another entity.
In essence, you may have paid the debt long ago and satisfied all terms as agreed, but there is simply no proof.
When this or a similar situation arises, in order to close the sale or refinancing of your home, the Texas title company may require you to obtain a surety bond.
In short, a Texas lost deed of trust surety bond serves as a financial guarantee for the title company that absolves the title company from any liability should the deed of trust subsequently be found and determined to have not been paid.
As you no doubt have learned, satisfying the title company’s request for a surety bond is crucial, and, admittedly, a bit distressing.
Fortunately, however, obtaining a title bond is usually not particularly difficult. Since it is the title company who requires the surety bond of you, they’ll provide you with much, if not all of the information that you’ll need to provide to our agency:
This includes the following:
All Texas lost deed of trust bonds have a standard credit check inquiry regardless of the amount of the surety bond required. The inquiry used by our agency --- and, to be frank, other surety agenciesl -- is a “soft inquiry”; it does not adversely impact your credit score.
For a lost deed of trust bond up to a $100,000 amount, for those who qualify, our agency offers potentially quick processing of this bond.
An amount greater than $100,000 is subject to a further underwriter review. You may also be asked to provide a financial statement as a condition of approval.
For lost deed of trust bonds, underwriters are typically looking for you to be able to demonstrate to have access to enough assets to satisfy a claim on your deed of trust bond, if such were ever the case.
The statements that you provide on financial statements are just that: statements. There is typically no independent further verification of the information that you provide.
After the review and approval of your application and documentation, your bond will ideally be approved.
It is issued with a onetime premium payment. The amount may be around 2% of the bond amount required, depending on your credit.
Though required by the title company, the lost deed of trust bond is yours as the homeowner. You’ll need to sign the completed bond.
Thereafter you’ll sign your completed deed of trust bond and accompanying documents with the title company.
Once filed, you’ve satisfied the title company’s requirement!
In addition to Texas, we also specialize in lost deeds of trust bonds for Colorado and California.
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