NOTICE ABOUT YOUR CLOSING (BUYERS/BORROWERS)
REPRESENTING THE INTERESTS
OF THE BUYER IN REAL ESTATE TRANSACTIONS
WHAT YOU SHOULD KNOW ABOUT YOUR
WAYS TO HOLD TITLE IN MASSACHUSETTS
OUR CERTIFICATION OF TITLE
TO BUYERS OF REAL ESTATE
CLOSING ATTORNEYS AND
THE CLOSING PROCESS - WHAT YOU SHOULD KNOW
TITLE INSURANCE AND ITS
IMPORTANCE IN YOUR TRANSACTION
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 our
firm 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
for directions to our offices as well as more information regarding matters
discussed in this letter. If you have any questions or comments related
to these matters please contact us.
THE INTERESTS OF THE BUYER IN REAL ESTATE TRANSACTIONS
If this is your first home purchase, or perhaps you
haven't purchased a new home in a while, 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 pendency of your purchase and
assist you if you are selling real estate to purchase your new home.
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
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
WHAT YOU SHOULD
KNOW ABOUT YOUR CLOSING (BUYERS/BORROWERS)
1. INSURANCE. At
the time of closing, please bring with you a homeowner Fire and Extended
Coverage insurance policy or binder for such insurance 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 MUST 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, at least three (3) business
days prior to closing.
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
Because we believe that obtaining an Eagle Owner’s
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. Please
contact our office for the exact language naming the bank. 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 “6 (d)” certificate stating that there are no unpaid common charges to
the condominium association as of the date of closing must be issued and
sent to us prior to closing. This certificate is obtained from the
trustees or managers of the condominium and must be in the form prescribed
by law. You should be sure that the seller procures such a document before
7. MANNER IN WHICH TITLE
WILL BE HELD. Below, you will find an explanation of some options
on how to hold title to real estate. Please advise our office on how you
would like to take title to the property and fax it back to us. This
information should be provided to us as quickly as possible since many
documents which we prepare require this knowledge.
8. OUR CERTIFICATION OF
TITLE. The following matters apply only if the transaction involves a purchase
of real estate with a dwelling designed to be occupied by not more than
four families and occupied in whole or in part by one or more of you. For
a detailed explanation please see Massachusetts General Laws, Chapter
93, Section 70. We are required to certify to you that the title to
the premises meets the standard established by that law. Our certification
to you should not be construed as establishing an attorney/client relationship
between you and our office. The services we render are only on behalf of
the mortgage lender unless other arrangements are made with our office,
and we cannot advise or counsel you relative to the transaction. If you
wish to obtain legal advice regarding the quality of the title or with
regard to some other aspect of the transaction, you should retain independent
9. SMOKE AND CARBON MONOXIDE
DETECTOR COMPLIANCE. We call your attention to the provisions of
Massachusetts General Laws, Chapter 148, you may be required to execute
a certification at the closing that you have inspected the installation
of the smoke and carbon monoxide detectors and are satisfied as to compliance
with this law. You should contact the sellers and ensure that they have
obtained, and will bring with them, a current certification from the city
or town fire department relative to the installation of smoke and carbon
monoxide detectors. The foregoing may not apply in certain commercial transactions.
If you are unsure of the applicability of this law, please check with your
counsel or contact our office.
10. WATER, SEWER AND ELECTRICITY.
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. If electricity is provided
by a municipal light plant, the sellers should obtain a final electric
11. HOMESTEAD DECLARATION.
Our office can prepare a Homestead Declaration for you for this transaction
if the home you are purchasing will be your primary residence. Under Massachusetts
law an owner of a home who intends to occupy it as their principal residence
can protect a portion of the equity in their home by merely filing a Declaration
of Homestead in the Registry of Deeds where the property is located. Please
let us know if you want us to prepare and record this Declaration.
This notice is provided to you pursuant to the Privacy
of Consumer Financial Information Act and the Federal Trade Commission's
implementing regulation hereunder, 16 CFR Part 313.
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;
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.
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.
WAYS TO HOLD TITLE
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
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
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 person’s 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
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
CERTIFICATION OF TITLE TO BUYERS OF REAL ESTATE
Our duties on behalf of the lender require that we
examine the title to the premises. In addition, under the provisions of
Massachusetts General Laws, Chapter 93, Section 70, we will also certify
title to the premises you are buying. This statute states in part:
"In connection with the granting of any loan or credit
to be secured by a purchase money first mortgage on real estate improved
with a dwelling designed to be occupied or to be occupied in whole or in
part by the mortgagor, the mortgagor is required or agrees to pay or be
responsible for any fee or expense charged or incurred by an attorney acting
for or on behalf of the mortgagee in connection with the rendering of a
certification of title to the mortgaged premises such certification shall
be referenced to the mortgagor and to the mortgagee."
The statute further prescribes that:
"The certification shall include a statement that at
the time of recording the said mortgage, the mortgagor holds good and sufficient
record title to the mortgaged premises free from all encumbrances, and
shall enumerate exceptions thereto. The certification shall further include
a statement that the mortgagee holds a good and sufficient record first
mortgage to the property, subject only to the matters excepted by said
Because the scope of our examination is confined to
matters of record at the appropriate Registry of Deeds and Registry of
Probate, our certification will specifically exclude the following matters:
Building and zoning laws for (Property City or Town) and other governmental
statutes and regulations which have not been examined;
All applicable health, environmental and hazardous waste rules, regulations,
laws and ordinances of the municipality, state and federal jurisdiction
in which the premises is located;
Such taxes, assessments or municipal charges that may be due and payable
and not shown on the Certificate of Municipal Liens or on the record at
the Registry of Deeds or from information provided by the municipality;
Persons in possession;
Any lien or claim, any other tax liability, or any matter of bankruptcy
or insolvency that may not appear in the indices of Registry of Deeds in
which the said premises are located;
Any set of facts or errors in description not apparent on the record that
would be shown by any accurate on-site survey or which a physical inspection
of the premises may disclose;
Matters not of record; forgeries; errors and omissions in the records and
indices of the Registry of Deeds and relevant Registries of Probate; lack
of sufficient capacity or competency of grantors.
Additionally we will note for exception and your
attention to significant easements, restrictions and other material matters
This disclosure is made in advance of the closing to
apprise you of the statutory language regarding certification of title
and the scope of our examination of the title to the premises you are purchasing
as well as the limitations of same. Please be aware that a policy of Owner’s
Title Insurance would cover issues related to some of the exceptions noted
above. Please call us if you have any questions.
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 attorney’s office. You undoubtedly
have questions as to what the role of the closing attorney is, what tasks
the closing attorney will perform and what will take place at the closing.
First, understand that the closing attorney 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.
At our firm 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 ensures 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
Legal Fee - Includes ordering and obtaining
a title examination from title examiners at the various Registry of Deeds,
title review, obtaining municipal lien information & survey information,
loan document preparation, title certification (if a purchase transaction),
communications with borrowers, sellers, broker, etc., conducting the closing,
final rundown of title, recording of documents, payoff of liens and sundry
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.
Municipal Lien Certificate - Obtained from the
city or town where the property lies, this document shows all outstanding
tax and utility liens.
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 owner’s policy can be purchased at the same time
at substantial savings over the rate if not issued simultaneously with
the loan policy. Owner’s 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 courier the mortgage payoff and loan documentation
for safe and timely delivery, to record the mortgage and other transactional
documents and obtaining 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. In some instances
your lender may pay some or all of these costs if your loan program so
prescribes. 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.
INSURANCE AND ITS IMPORTANCE IN YOUR TRANSACTION
Real estate title insurance very simply is an insured
statement of the conditions of one's title or ownership rights to a certain
piece of real estate. The policy guarantees that the property being purchased
or mortgaged is free from undisclosed liens or rights and it guarantees
additionally that any confusion as to rights of ownership will be resolved
in favor of the party owning the real estate or the title insurance company
will be liable for loss in value to the policy holder up to the policy
A buyer purchasing real estate is offered the opportunity
to purchase an owner's policy of title insurance by the settlement agent,
attorney, escrow company or title agent conducting the real estate closing.
For example, you decide to purchase a house in Boston and are obtaining
a mortgage to help you finance the purchase from a bank or mortgage company.
That institution will require an examination of the title to the property
and have the party reviewing the title issue to them a lender's policy
of title insurance insuring that the property is or will be owned by the
purchaser and that there are no defects, liens or encumbrances on the property
which would adversely affect the marketability of its mortgage.
Since the settlement agent, attorney, escrow agent
or title agent is already issuing a lender's policy of title insurance,
the buyer has the opportunity at that time to obtain an owner's policy
of title insurance at a cost substantially less than the buyer would pay
if the policy was not written simultaneously with the lender's policy.
The owner's policy of title insurance ensures that
the owner has good marketable title to the property free of any encumbrances
or liens that would adversely affect the property, except those made known
to the buyer, and ensures to the owner that if any such liens, encumbrances,
defects or other title problems become known, the title insurer will defend
the buyer's title to the property.
In many instances we are asked whether or not title
insurance is necessary or advisable for the owner to purchase. We recommend
the purchase of the title insurance for some very simple reasons. First,
the premium for purchase of the title insurance policy is a one time charge.
Since the purchaser is usually borrowing money to finance the purchase,
the majority of the cost of the title insurance policy that the owner would
receive has been paid through the premiums for the lender's policy which
is required by the loan. Usually for a few hundred dollars or less the
owner can insure against a variety of problems which could occur in the
future. These items include forged documents in the chain of title, signatures
of mentally incompetent persons or minors which are unknown to the party
reviewing the title, mistakes or inaccuracies in recording of legal documents
of title at the appropriate place or recording or registration of title,
fraud in the execution or in the handling of the recording or indexing
of recorded documents, undisclosed or missing heirs, fraud in the execution
or in the handling of a transaction in the prior chain of title, invalid
divorces or misrepresentation of marital status of the parties signing
the documents, and most importantly clerical errors in the public records
and claims of parties unknown because their claims have not been filed
in any indices of public record. The enhanced policies such as First American’s
Eagle Policy go well beyond these simple coverages and provide coverage
for a host of issues that can affect property both prior to and after you
Even though the buyer may be asked to pay for the lender's
title insurance protection, the lender's policy of title insurance does
not protect the buyer and a claim can only be made if the lender suffers
a financial loss because of a title defect that adversely affects a foreclosure
of the buyer's mortgage. There have been many defects in titles which could
not be revealed by an examination of the public records. These defects
usually arise at a time after the transaction has taken place and purchasers
can suffer significant losses as a result of them. That is why owner's
title insurance makes a great deal of sense.