Title Insurance And Secured Lines Of Credit

Most financial institutions will establish Secured Lines of Credit using Title Insurance and the assistance of lawyers who work directly for the financial institution. The amount charged by the financial institution as a setup charge for this type of credit facility varies but they will quote an all-inclusive amount. If the customer wishes to retain his or her own lawyer to complete this work, the financial institution will charge a lesser setup fee, but he or she must then pay that lawyer.

It is a simple economic fact that a customer's lawyer will not be able to prepare the documents, do the necessary searches, and give the appropriate legal opinion to the financial institution for a legal account which, when added to the bank's setup fee, is less than the all inclusive fee that the financial institution would charge.

What customers should understand, however, is that the lawyer who acts on behalf of the financial institution will provide no legal advice to the customer and will probably require the customer to sign a document confirming that the customer has waived the right to obtain Independent Legal Advice. The documents which are signed under a Secured Line of Credit give very powerful and broad powers to the financial institution. If you retain your own lawyer, you will have an experienced objective party to advise you about the best way to manage your Line of Credit and the risks associated with using it for certain investments. The lawyer will be able to explain the powers contained in the mortgage and additional expenses which you may incur, such as:

a) The additional setup costs incurred if you should purchase a new home.

b) The additional costs which you will incur if you revise your first mortgage.

c) The fees which you will pay when the Secured Line of Credit is eventually discharged.

If you have any other questions about real estate matters or financial institutions, please check the other entries under "Real Estate", send us your question in the "contact" section, or see a lawyer.