Pro-Forma Title Commitments

It pays to know your investment. Liberty Bell Agency has searched over 250,000 properties since 1993.

What is a Pro Forma Title Commitment?

A pro forma policy is a sample policy which shows a lender what its actual loan policy will look like once issued after closing. A pro forma policy will set forth the insured lender’s name as it will appear on the loan policy, the amount of title insurance to be issued, the date of the policy (e.g. “the date and time of recording of the insured Mortgage/Deed of Trust/Security Deed”), the title holder or owner of the real estate, exceptions that will appear on the loan policy, any subordinate matters that will appear in the loan policy and endorsements which will be issued with the loan policy.

Why is it so important?

Because a pro forma policy or marked-up title commitment are often not provided by the title agent until the day of closing or a day or two prior to closing, it is easy to overlook this valuable item. But it is important to obtain a pro forma policy or marked-up title commitment prior to disbursing any loan funds. Without this, a lender may not realize that a particular exception will appear on the loan policy or that title was not able to issue a particular endorsement which is necessary to insure over an encroachment. Obtaining a pro forma policy or marked-up title commitment at closing will ensure that a lender will receive the proper title coverage and can prevent a lot of headaches post closing.