What is the role of a title company in a mortgage transaction?

The role of a title company in a mortgage transaction is primarily to ensure that the title to the property is free of any liens or encumbrances and to provide title insurance that protects against any future claims on the property. This process involves conducting a thorough title search to verify the legal ownership of the property and to identify any potential issues that could affect the transaction, such as outstanding liens, easements, or other claims.

By clearing the title, the title company helps to safeguard the interests of both the lender and the buyer, ensuring that the buyer receives clear ownership upon closing. The title insurance policy issued by the title company serves as protection against any unforeseen challenges related to the title that may arise after the purchase, giving both parties peace of mind during the transaction. This function is crucial in real estate transactions, as it provides security and confidence that the property being purchased is legally sound.

The other choices pertain to different roles within the mortgage transaction process. Providing loan options is typically the responsibility of lenders or mortgage brokers, while collecting and managing mortgage payments falls under the duties of a loan servicer. Facilitating negotiations between buyers and sellers is generally the role of real estate agents. Only the title company directly relates to ensuring that the property's title is clear