TRUE OR FALSE: Title companies analyze three different points when a lender is seeking construction coverage: (1) contracts let prior to closing; (2) contracts which will be let subsequent to the closing but paid for out of the proceeds of the insured mortgage; and (3) how much of the loan will be disbursed at closing.
TRUE! One of the more complex and confusing issues that can rear its ugly head at a real estate closing is that of the existence of past, present, or, in some cases, future contracts for construction on the land. These contracts can create headaches for owners, purchasers, lenders, attorneys, and title insurers if the issues surrounding these contracts are not dealt with prior to closing. Check out our article, "Construction Issues at Closing: A Title Company's Perspective" which will help identify construction issues that arise at closing and how Chicago Title Insurance Company deals with these issues.