With responses of individuals, businesses and federal, state and municipal governments to the COVID-19 pandemic evolving quickly, CATIC is sending this update in order to provide you with the most current information concerning CATIC’s procedures and underwriting guidance.
GAP COVERAGE
CATIC reaffirms that it is providing gap coverage in its title policies because a town hall is closed and as a result documents cannot be recorded immediately after the closing.
Some title companies have revised their title affidavits to include an owner gap indemnity.
CATIC is not requiring the use of any revised Owner Affidavit or revised Commitment
. CATIC will accept these revised affidavits if the owner who is selling or refinancing provides one, but we are not requiring them. As the earlier communication noted, in most cases standard underwriting guidelines apply. In other cases, CATIC will assist with the underwriting of the title insurance policy, including:
- Situations where the title search and agent inquiries find a recent history of disputes or economic distress, evidenced by, for example, a recording of involuntary liens; and
- Any other situation where you have questions or concerns.
DATE OF POLICY
The Standard and Expanded owner’s policy forms and the Standard loan policy contain automatic gap coverage provisions that effectively insure against loss resulting from any defect, lien or encumbrance attaching or recorded between the date of policy and the date the insured deed or mortgage is recorded. Therefore, you should date your policies the date of closing. In doing so, the gap between date of closing and date of actual recording will be insured automatically. No endorsement is needed or required.
To simplify the process for our agents, however, and recognizing that different lenders and their lawyers have different requirements and procedures for the dating and completion of the title policy, the Company is providing gap coverage whether or not the issued CATIC policy is dated the date of closing OR the date of the recording.
RECORDING
While CATIC has received reports that some town halls operating with a reduced staff may be willing to accept documents delivered by an overnight courier service such as FedEx, CATIC does not recommend sending documents by courier service to any town hall with limited staffing or reduced hours, unless the agent first calls and confirms that (1) someone at the town hall will accept and sign for the documents, and (2) the town hall will be open on the expected delivery day. In all other situations where the town hall is closed or operating with reduced staff and will not accept delivery,
CATIC is recommending that its agents hold the executed documents and then record those documents as soon as possible after the town hall reopens.
SEARCHING
A prior notice emphasized that CATIC will consider a completed online search to be equivalent to a search performed in the town hall. However, not all town halls have land records online, and in some cases, the online records do not allow for a full search. CATIC recommends that, prior to requesting a search, an agent check the CATIC policy library to see if there is back title for the property. Where back title exists, it may make up for the fact that the online records are incomplete.
Even in those cases where no back title exists, CATIC may be willing to accept less than a full search in many situations. Please contact Title Services directly regarding the type of transaction and any available information you have regarding the property, and we will do our best to insure the transaction.
CATIC will continue monitoring the situation and provide updates as needed. Please feel free to contact us with any questions.
