Even though you are now a lot smarter when it comes to these discounted rates, keep reading!!! There is a catch.
To issue these discounts, your underwriter requires “proof” of the prior title insurance policies on which you are basing the discount.
Different underwriters require different levels of proof and you need to be keenly aware of what your particular underwriter requires. Some require you to obtain an actual copy of the original policy so you have the policy number to submit. Some will allow you to rely on a prior HUD-1 statement showing a line item for the policy premium. When it comes to proof of loan policy, some underwriters with more lax proof requirements agree that if the original loan was in favor of a larger lender (Wells Fargo, Chase, etc.), or one that always requires a title insurance policy and did so at the time that the original loan policy was issued, that mere fact is enough proof of a prior loan policy.
Because of this proof requirement, some title agents only issue discounts if they issued the prior policy or if the same lender is used for the old and new loan. The time and effort that it takes to track down a prior policy may not be worth the premium gained from that order. That is a policy decision that your company will weigh.
***This is not guidance on the actual calculation of discounted insurance rates. The actual discount calculations are done with the specific guidance of your underwriter and maybe automatically calculated with your closing software or web-based closing application.
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