What is the role of a title company in a mortgage transaction?

The role of a title company in a mortgage transaction is fundamentally about ensuring that the title to the property is clear and that the closing process runs smoothly. The title company conducts thorough searches of public records to confirm that the title is free of liens, encumbrances, or other issues that could affect ownership.

In addition to verifying the title's status, the title company also plays a crucial role in overseeing the closing process, which involves coordinating the various elements and stakeholders, such as the buyer, seller, and lenders. They prepare and facilitate the signing of necessary documents, collect and disburse funds, and ensure that everything is compliant with state laws.

This service is vital for protecting all parties involved, particularly the buyer, as it provides assurance that they will gain clear ownership of the property without unforeseen legal issues arising after the transaction is completed. Other roles, such as creating financial statements or providing legal representation, are typically handled by other professionals, which is why those options do not accurately reflect the title company's primary responsibilities in a mortgage transaction.