Mortgage Companies

• Mortgage companies originate and finance mortgage loans. Origination means the mortgage company representative completes your loan paperwork and negotiates the terms of your mortgage. During the origination process, the mortgage company also obtains a copy of your credit report and examines your financial information, such as federal tax forms and income statements. Mortgage companies typically partner with larger lending institutions to finance the mortgages they write. Some mortgage companies only finance the mortgages they write for a short time before selling them to other lending institutions or investors.
  
  

Title Companies

• When you submit an offer on a home and that offer is accepted, before your loan can close, a titling company performs a title search on the property. The company checks whether there are any prior claims made against the property. If there are, the seller of the home usually has to clear the claim before you can close on the property. For example, if the seller has an unpaid tax lien, that is a prior claim.
  
  

Title Insurance Lenders

• Lenders purchase title insurance to protect themselves against future financial losses should the titling company fail to complete a thorough title search on the property. Failing to complete a thorough search or investigation on the property title can result in overlooking existing liens or failing to detect liens not officially documented. Title insurance also offers lenders protection against any defects in the property the company did not discover during the title search.
  
  

Title Insurance Property Owners

• Once the title company determines the title to the property is clear, you can close on your mortgage loan. The company offers title insurance protecting you, as the new owner, and the lender against any future title claims made against the property as they pertain to the previous owners. This means that if a person, business or government entity tries to make a claim against the title of the property for something that happened before you owned it, title insurance protects you from financial losses by paying the claim.