Opinion and Guaranty of Title and of Validity of Mortgage

The opinion and guaranty of title and validity of mortgage

The opinion and guaranty of title and of validity of mortgage is a document that serves two purposes. Firstly it gives you a legal opinion on whether the seller of the property is the rightful owner of the property in question or not. There is made an examination of the public documents to ascertain the title of the mortgage. It includes the period from abstract ownership of the property to the time when there were legal and recorded owners of the property. The insurer makes sure that the property that is being given for mortgage is free of any lien and has not been previously mortgaged elsewhere. This portion of the document is signed by an officer or the member of the insurance company.

The second portion of the document is the guaranty of validity of mortgage and it is also to ensure the validity of the mortgage that is being given by the borrower in order to secure a loan amount. It is the duty of the insurer to make sure that the mortgage is in accordance with the law and that there is no other liability associated with the mortgage. The liability could be in the form of lien, encumbrances or any type of objection in the ownership of the property. Also the title insurer should make sure that the amount that is paid to the mortgagee is not in excess of the actual debt that is pending on the mortgagee. The title insurer must take into consideration all the aspects before actually signing the opinion and guaranty.

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Opinion and guaranty of title and of validity of mortgage.
Opinion of Title

Based on an examination of the mortgage, an examination of the certified abstract of title (or certified chain of title and on examination of the public records indicated by it), and an examination of the public records subsequent to the period covered by the abstract or chain of title, insurer here advises the above named mortgagee (the terms “mortgage” and “mortgagee” having the enlarged meaning given them in the conditions in this instrument) that, in the opinion of insurer, the mortgage described in the attached Schedule A has been executed in accordance with law and constitutes a valid mortgage lien on the property described in the mortgage as security for the indebtedness identified by that mortgage, and that mortgage lien is subject only to such incumbrances, liens, and other objections as are referred to in the attached Schedule B.
[Signature of officer or member of insurer]
Guaranty of Validity of Mortgage
In consideration of insurer having qualified as title insurer [guarantor] under _________[statutory citation] and in consideration of the application for this policy [guaranty] and undertakings in that application and in consideration of $_____, receipt of which is here acknowledged, insurer guarantees to mortgagee (‘mortgagee’ and ‘mortgage’ having the enlarged meaning given them in the conditions in this instrument) that the mortgage referred to in attached Schedule A has been executed in accordance with law; and insurer [guarantor], subject to the conditions in this instrument, further guarantees to mortgagee, the mortgagee’s legal representatives, heirs, legatees, successors and assigns, that the mortgage constitutes a valid mortgage lien on the property described in the mortgage, subject only to such incumbrances, liens, and other objections as are shown in attached Schedule B, and insurer will pay to mortgagee all loss or damage, in an amount not to exceed the amount of indebtedness, as stated above, that mortgagee may sustain because of incumbrances, liens, or other objections in the title to the property of mortgagor named in attached Schedule A that have not been excepted in attached Schedule B. This guaranty shall become effective when the opinion above has been duly signed and delivered by a member of insurer.
This guaranty does not guarantee the validity of the debt and note secured by the mortgage or the genuineness of signatures on the mortgage and note.
[Signature of insurer by authorized officer or member]
Attest: _________, Secretary of _________[insurer]