Are you in the process of buying or selling a home? If so, you'll need to familiarize yourself with a crucial document known as the statement of information. This often-overlooked piece of paperwork holds significant importance during escrow. To shed light on this commonly misunderstood topic, we've enlisted the help of the Land Title Association. Read on as we answer some of the most frequently asked questions about Statements of Information, providing you with a deeper understanding of its significance.
What's in a Name?
When it comes to uncovering matters that affect title to real property, a title company knows there's "quite a bit" tied to a name. This is where the Statement of Information proves invaluable. It equips title companies with the necessary information to distinguish buyers and sellers from others who share similar names. By identifying the true parties involved, title companies can disregard judgments, liens, or other matters on public records under similar names.
Understanding the Statement of Information
A Statement of Information is a form that's routinely requested from the buyer, seller, and borrower when seeking title insurance. By completing this form, you provide the title company with the information required to thoroughly examine documents. This enables the company to disregard matters that have no bearing on the property to be insured, focusing solely on issues that pertain to the correct individuals.
Unveiling the Purpose of the Statement of Information
Every day, various documents affecting real property, such as liens, court decrees, or bankruptcies, are recorded. When a title company comes across a recorded document with a similar name to that of the parties involved in a title transaction, they must inquire about its relevance. If the document does affect the parties being insured, it can impact the property's title and must, therefore, be listed as an exception from coverage under the title policy. By completing the Statement of Information accurately, the title company can differentiate between parties with identical or similar names and handle their duties efficiently, without unnecessary delays.
What Information Is Required?
The information requested in the Statement of Information is personal yet essential to avoid any closing delays. You and your spouse, if married, will need to provide your full names, social security numbers, year of birth, birthplace, and citizenship information. Additionally, if you are married, the date and place of your marriage will be required. Furthermore, the form will ask for residence and employment details, as well as information on previous marriages in the case of divorce.
Confidentiality Is Guaranteed
Rest assured, the information you provide in the Statement of Information remains completely confidential. It is solely for the title company's use to conduct the necessary record search before issuing a title insurance policy.
Consequences of Non-Compliance
Failure to provide the requested Statement of Information can have significant consequences. At best, it could hinder the title company's search and examination process, resulting in delays in issuing your title policy. At worst, it could jeopardize the successful closing of your escrow. Without this vital document, the title company would have to list judgments, liens, or other matters that may affect the property as exceptions from coverage. Such exceptions are generally unacceptable to lenders, whose interests must also be insured.
In conclusion, title companies take every possible step to identify and address any known risks that could impact your property. By completing the Statement of Information accurately, you enable them to provide an efficient and confidential service that protects your interests as a homebuyer.
Article by CLTA - Back to helpful first time home buyer tips and information