From Closing to Clear Title: The Essential Process of Release Tracking
What is Release Tracking in Title Insurance?
Release tracking is a service that searches through official records to confirm that instruments identified in the Title Commitment have been properly recorded within a stipulated contractual time which ranges from 30–90days.
For example, mortgages, HELOCs, judgment liens, lis pendens, or financing statements require documents such as satisfactions, releases, terminations, cancellations, or subordinations after a real estate transaction.
Release tracking is an important post closing due diligence service that ensures peace of mind for property owners by making sure that the title is recorded.
Why is Release Tracking Important?
Release tracking is important because it helps to protect property owners from title defects. When a mortgage or other lien is released, the lender is supposed to record a satisfaction of the lien. However, this does not always happen. If the lien is not released, it can cloud the title to the property, which could make it difficult to sell or refinance the property.
Release tracking can help to prevent this by ensuring that all liens are properly released. It can also help to identify any liens that have not been released, so that they can be cured.
How Does Release Tracking Compare to a Mutual Indemnity Agreement?
A mutual indemnity agreement (MIA) is an agreement between two or more title insurance companies that indemnifies each other for certain title defects. This means that if one company issues a title insurance policy that later turns out to be deficient, the other companies in the agreement may be required to help pay the claim.
Release tracking is different from an MIA in that it is a service that is used to prevent title defects, while an MIA is a contract that is used to resolve title defects that have already occurred.
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How Does Release Tracking Compliment a Mutual Indemnity Agreement?
Release tracking and mutual indemnity agreements can work together to protect property owners from title defects. Release tracking can help to prevent title defects by ensuring that all liens are properly released. An MIA can help to resolve title defects that have already occurred by providing a mechanism for the title insurers to share the cost of the claim.
As a best practice, a title agency whose underwriter may be a part of a MIA use release tracking and only rely on an MIA when all other options have been exhausted. This can provide an extra layer of protection for property owners and can help to reduce the risk of title defects.
Conclusion
Release tracking is an important post-closing due diligence service that can help to protect property owners from title defects. It can be used in conjunction with a mutual indemnity agreement to provide an even greater level of protection.
Stay Wicked,
Cheryl
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The information provided here (including, but not limited to instructions, steps, or forms) is for general guidance and educational purposes only. I am not an attorney and am not giving legal advice. Information should not be considered legal, underwriting, or financial advice and is followed at your own risk. Readers should consult with their attorney and/or underwriter to obtain advice tailored to their specific circumstances.