First American Corporation (New) · NYSE:FAF
First American Corporation (New) — First American Financial — Reg A Offering (August 2022)
44 slides from First American Corporation (New)'s offering presentation, Aug 24, 2022
Slide 1: Title 101: Title Insurance Overview
SESSION 4 Title 101: Title Caitlin Ostrander | Division Underwriting Counsel, California Insurance Overview Bethany Flanders, Esq. | Senior Underwriting Counsel, Maryland August 24, 2022 First American Title Insurance Company, and the operating divisions thereof, make no express or implied warranty
Slide 2: Today's Presenters
Today’s Presenters Caitlin Ostrander Bethany Flanders, Esq. Division Underwriting Counsel Senior Underwriting Counsel National Commercial Services National Commercial Services PAGE 1 First American Title Insurance Company, and the operating divisions thereof, make no express or implied warranty resp
Slide 3: Agenda
Agenda What is Title? Commitment Process and Products Tips from Underwriters Tips from Escrow Officers Future Trends PAGE 2 First American Title Insurance Company, and the operating divisions thereof, make no express or implied warranty respecting the information presented and assume no
Slide 4: What is Title?
What is Title? Title is like the history of a piece of real property; like a biography of a particular piece of real property Who has owned it in the past? How have they encumbered it? What rights have they granted to others? PAGE 3 First American Title Insurance Company, and the operating d
Slide 5: How do we find out this information?
How do we find out this information? PAGE 4 First American Title Insurance Company, and the operating divisions thereof, make no express or implied warranty respecting the information presented and assume no responsibility for errors or omissions. First American, the eagle logo, First American Title
Slide 6: S & E Process: Getting Started
S & E Process: Getting Started Confirm land ‒ Map and tax lot ‒ Address ‒ Arbitrary maps Confirm ownership Provide any prior policies Preliminary review conducted to confirm correct property being searched PAGE 5 First American Title Insurance Company, and the operating divisions thereof, ma
Slide 7: S & E Process: Search Parameters
S & E Process: Search Parameters Documents recorded in the Public Record (organized by county) Real property taxes General index search ‒ Judgments ‒ Pending suits PAGE 6 First American Title Insurance Company, and the operating divisions thereof, make no express or implied warranty respecting
Slide 8: Abstracts
Abstracts On the West Coast, the use of Title Plants is more widely utilized rather than independent abstractors which is more common on the East Coast ‒ Title plants is essentially in-house abstracting where information is being pulled from an online records database East Coast states typically
Slide 9: S & E: Grantor / Grantee Index
S & E: Grantor / Grantee Index Organized by calendar year Alphabetized list of all grantors named in document recorded that year Next to each grantor is name of the grantee and brief description of document The grantee index is the same, but organized by grantee name AKA – direct/indirect
Slide 10: S & E: Tract Book Index
S & E: Tract Book Index Simpler than grantor/grantee indexes Each page is allocated to a single parcel of land or group of parcels called a tract Brief description of recorded document is provided Typically provides other cross-referenced details like the grantor and grantee, description of
Slide 11: Abstract Search Process continued
Abstract Search Process continued Process • Confirm current ownership and create a “chain” This is a list of historical owners of the real property. Important to review for “breaks” meaning a transfer from a historical owner is missing and MUST be fixed; total failure of title • Search historical
Slide 12: Title Commitment
Title Commitment PAGE 11 First American Title Insurance Company, and the operating divisions thereof, make no express or implied warranty respecting the information presented and assume no responsibility for errors or omissions. First American, the eagle logo, First American Title, and firstam.com a
Slide 13: Commitment
Commitment A title examiner reviews the abstract to confirm current ownership and what recorded documents still affect the real property PAGE 12 First American Title Insurance Company, and the operating divisions thereof, make no express or implied warranty respecting the information presented and
Slide 14: Title Commitment
Title Commitment This is then compiled into a Commitment which is then issued to the client A title commitment is essentially an offer to issue a title insurance policy upon closing if the outlined requirements and conditions located within the Commitment are met Three main sections or parts;
Slide 15: Parts of a Commitment
Parts of a Commitment Schedule A ‒ Date is the most recent searched date of the public records. It is almost never the current date as there is a lag time between when documents are recorded and when they are available in the public records. This is called the “gap”. It is very rare to find a juri
Slide 16: Parts of a Commitment: Schedule B-I
Parts of a Commitment: Schedule B-I Schedule B-I Requirements ‒ This lists out the requirements which must be fulfilled at or prior to closing in order for the policy to be issued. ‒ They will include general requirements like payment of premium, recording the documents, providing entity authority
Slide 17: Parts of a Commitment: Schedule B-II
Parts of a Commitment: Schedule B-II Schedule B-II Exceptions ‒ This will list out all of the recorded documents and additional public information which affect title. There are typically general exceptions like taxes, acreage, etc. to specific recorded documents which were found in the land record
Slide 18: Title Insurance: Schedule B Exceptions to Coverage
Title Insurance: Schedule B Exceptions to Coverage Schedule B Exceptions Standard exceptions (vary but reference off- record defects) ‒ Matters that would be disclosed by a survey and/or inspection ‒ Inchoate construction lien claims Special exceptions ‒ Easements ‒ Restrictive covenants ‒ Mortg
Slide 19: Mechanic's Liens Exceptions
Mechanic’s Liens Exceptions Both mechanic’s lien laws and title insurance coverage varies greatly from state to state What is a Mechanics Lien? – Pursuant to state statute, contractors, subcontractors, material suppliers and others that have worked on or supplied labor or materials to real prope
Slide 20: Mechanic's Lien Priority
Mechanic’s Lien Priority Typically, mechanic’s lien priority is set at “commencement” of construction – What “Commencement” means differs from state to state Relation Back Doctrine – When does the lien attach and who has priority? – Common Rule: Mechanic’s Liens for all contractors and subcontra
Slide 21: Mechanic's Liens as a Standard Exception
Mechanic’s Liens as a Standard Exception There is a standard Mechanic’s Lien exception in every Commitment issued regardless of the jurisdiction Determining coverage either through deletion of the exception and/or via endorsements depends on the state statute and specifics of the transaction PAG
Slide 22: Commitment vs Preliminary Title Report
Commitment vs Preliminary Title Report What is the difference between a Commitment and a Preliminary Title Report (PTR) (can also be called a Report of Title or an Owners/Encumbrances Report)? –While a Commitment sets out not only items affecting the property, it also provides requirements and con
Slide 23: What is included in a PTR?
What is included in a PTR? The current owner as shown by Public Records The vesting Deed The legal description A list of all recorded documents affecting the property (similar to Schedule BII of a Commitment without standard exceptions included or other items added after thorough review) S
Slide 24: Why Order a PTR Instead of a Commitment?
Why Order a PTR Instead of a Commitment? Various Reasons to Order a PTR: – Preliminary research of a parcel you are potentially interested in buying or selling to see if there are any major defects that can be taken care of prior to contracting to buy or sell the property – Information on adjacent
Slide 25: Other Types of Title Reports
Other Types of Title Reports Ownership and Encumbrance (O&E) Lien and Encumbrance Report Lot Book Report Combined Report – Available on a state-by-state basis PAGE 24 First American Title Insurance Company, and the operating divisions thereof, make no express or implied warranty respecting t
Slide 26: Title Process and Products
Title Process and Products PAGE 25 First American Title Insurance Company, and the operating divisions thereof, make no express or implied warranty respecting the information presented and assume no responsibility for errors or omissions. First American, the eagle logo, First American Title, and fir
Slide 27: Title Insurance: Basic Process from Open Order to Policy
Title Insurance: Basic Process from Open Order to Policy Pre-negotiation between parties (custom and practice varies by locale) Search and exam Commitment Negotiation between parties and/or with title company – Title Objection Letters Underwriting (risk analysis and decision-making on risk
Slide 28: Fundamentals of Title Coverage
Fundamentals of Title Coverage Subjects to terms and conditions of the Policy, we insure: Owners or Lenders As of a Specific Date and Time That have an Interest In a Described Parcel of Real Property Is Vested in a Specific Party And it is Free and Clear of Defects, Liens and Encumbrance
Slide 29: What is title insurance and what is not title insurance?
What is title insurance and what is not title insurance? PAGE 28 First American Title Insurance Company, and the operating divisions thereof, make no express or implied warranty respecting the information presented and assume no responsibility for errors or omissions. First American, the eagle logo,
Slide 30: Title Insurance: Not Typical
Title Insurance: Not Typical Differs from other types of insurance ‒ One-time premium ‒ Coverage is retrospective ‒ Policy of indemnity, not policy against casualty ‒ Liability based on past, not prospective events PAGE 29 First American Title Insurance Company, and the operating divisions thereof
Slide 31: Parts of the Policy
Parts of the Policy Policy Jacket ‒ Standard v. Extended Coverage Policy ‒ Covered Risks ‒ Exclusions Schedule A, Schedule B, Schedule B-II Endorsements PAGE 30 First American Title Insurance Company, and the operating divisions thereof, make no express or implied warranty respecting the infor
Slide 32: Title Insurance: Basic Coverage
Title Insurance: Basic Coverage Covered Risks (Abridged) Vested interest Defect in lien, or encumbrance on the Title ‾ Forgery ‾ Unauthorized transfer ‾ Improperly executed ‾ Improperly indexed document ‾ Unpaid taxes Unmarketable title Lack of access Missed recorded matters Lender’s pri
Slide 33: Title Insurance: Exclusions from Coverage
Title Insurance: Exclusions from Coverage Exclusions from coverage Governmental matters Created, suffered, assumed or agreed to by the Insured Matters known to the Insured, but not disclosed Items specifically excluded in Schedule B to the policy Defects resulting in no loss Defects atta
Slide 34: Policies
Policies Two main types of polices; Owner’s policy Loan policy insuring insuring the buyer the lender PAGE 33 First American Title Insurance Company, and the operating divisions thereof, make no express or implied warranty respecting the information presented and assume no responsibility for error
Slide 35: Extended Policy: Additional Coverages
Extended Policy: Additional Coverages Off Record Matters ‒ Encroachments ‒ Inchoate Mechanics Liens Our Due Diligence ‒ Affidavits ‒ Inspections ‒ Surveys PAGE 34 First American Title Insurance Company, and the operating divisions thereof, make no express or implied warranty respecting the infor
Slide 36: Title Insurance: Endorsements
Title Insurance: Endorsements An attachment to the policy that modifies coverage, usually expanding it Address specific risks Sources: ALTA, CLTA, TLTA, title companies Price, underwriting practices and availability varies by state Some endorsements may be modified depending upon state reg
Slide 37: Practical Tips from the Field
Practical Tips from the Field Understand the Be proactive with Consider the public purpose of the authority record affidavit Holdback No title coverage in Agreements and the escrow Give us a heads up Mutually Signed instructions Cancellation Instructions Run docs and scenarios by us PAGE 36 First Am
Slide 38: Why the Commercial Department
Why the Commercial Department Experience ‒ Endorsements ‒ Deal Variety Increased Specialization ‒ Energy ‒ Forestlands ‒ Farms ‒ Apartments ‒ Hospitality ‒ Portfolios ‒ Multi-State ‒ Equity/Non-Standard structures Additional flexibility to meet customer needs PAGE 37 First American Title Insur
Slide 39: Additional Value Provided, Besides the Obvious
Additional Value Provided, Besides the Obvious Ancillary Services Extra Eyes Navigation of Customs and Practices Claims Avoidance Advanced strategizing of Deal Structures Ability to mobilize additional resources and expertise PAGE 38 First American Title Insurance Company, and the operating division
Slide 40: Future Trends
Future Trends Growth in smaller cities ‒ With the rise of telecommuting post-pandemic, there has been a rise in migration from large cities like NY to smaller city areas like Tampa or Phoenix ‒ This will, in turn, drive the commercial market in these smaller areas of the country Technology is on
Slide 41: Future Trends Cont.
Future Trends Cont. Credit standards are starting to tighten due to increasing economic uncertainty which will reduce the availability of lending across the board Inflation continues which will increase construction costs due to labor shortages and supply chain issues Increasing ARMs mortgages
Slide 42: Questions
Questions PAGE 41 First American Title Insurance Company, and the operating divisions thereof, make no express or implied warranty respecting the information presented and assume no responsibility for errors or omissions. First American, the eagle logo, First American Title, and firstam.com are regi
Slide 43: Title Camp 5: Insuring Leasehold Estates webinar
Register Now for our CLE live webinar Title Camp 5 | Insuring Leasehold Estates including Ground Leases & Bifurcated Estates Presented by First American Title’s Pam Sullivan & Dawn Lewallen REGISTER NOW Wednesday, September 21 11 am Pacific Time | 2 pm Eastern Time Title Camp Exit Survey atIf your 1
Slide 44: Thank you!
Thank you! First American Title Insurance Company, and the operating divisions thereof, make no express or implied warranty respecting the information presented and assume no responsibility for errors or omissions. First American, the eagle logo, and First American Title are registered trademarks or
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