B-164867, SEPT. 4, 1968
Highlights
ADVISES: "IT IS A REQUIREMENT OF OUR BANK AND THE FHA THAT TITLE INSURANCE MUST BE OBTAINED BY THE BORROWER IN ORDER TO SECURE REAL ESTATE FINANCING. IT IS A FURTHER REQUIREMENT THAT AN ALTA POLICY BE ISSUED CONCURRENT WITH THE STANDARD TITLE INSURANCE POLICY. IT IS CUSTOMARY FOR THE PURCHASER TO PAY FOR THE TITLE INSURANCE ON THE PROPERTY THEY ARE ACQUIRING.'. AS YOU POINT OUT IN YOUR LETTER THE COST OF AN OWNER'S TITLE POLICY FOR THE PROTECTION OF THE PURCHASER OF A RESIDENCE IS NOT REIMBURSABLE UNDER SECTION 4.2D OF BUREAU OF THE BUDGET CIRCULAR NO. WHEN THE COST OF THE TITLE INSURANCE IS INCURRED BY THE PURCHASER FOR THE PROTECTION OF THE LENDER IT IS REIMBURSABLE IF. IT IS CUSTOMARILY PAID FOR BY THE PURCHASER.
B-164867, SEPT. 4, 1968
TO MISS MARY M. RYDQUIST:
WE REFER TO YOUR LETTER OF JULY 10, 1968, REQUESTING OUR DECISION CONCERNING THE PROPRIETY OF CERTIFYING FOR PAYMENT A VOUCHER TRANSMITTED THEREWITH IN THE AMOUNT OF $190 IN FAVOR OF MR. PIETER J. VAN ZANDEN. THE AMOUNT REPRESENTS THE COST OF A STANDARD TITLE POLICY REQUIRED AS A CONDITION PRECEDENT TO THE OBTAINING OF FINANCING ON A RESIDENCE PURCHASED BY THE EMPLOYEE INCIDENT TO A TRANSFER OF OFFICIAL STATION TO MENDOCINO COUNTY, CALIFORNIA. IN SUCH CONNECTION THE BANK OF AMERICA AT UKIAH, CALIFORNIA, ADVISES:
"IT IS A REQUIREMENT OF OUR BANK AND THE FHA THAT TITLE INSURANCE MUST BE OBTAINED BY THE BORROWER IN ORDER TO SECURE REAL ESTATE FINANCING.
"THE STANDARD TITLE POLICY FORM MUST BE OBTAINED AS JOINT PROTECTION FOR BORROWER AND LENDER, AND, IN THE CASE OF THE FHA LOANS, IT IS A FURTHER REQUIREMENT THAT AN ALTA POLICY BE ISSUED CONCURRENT WITH THE STANDARD TITLE INSURANCE POLICY.
"IN THE COUNTY OF MENDOCINO, IT IS CUSTOMARY FOR THE PURCHASER TO PAY FOR THE TITLE INSURANCE ON THE PROPERTY THEY ARE ACQUIRING.'
AS YOU POINT OUT IN YOUR LETTER THE COST OF AN OWNER'S TITLE POLICY FOR THE PROTECTION OF THE PURCHASER OF A RESIDENCE IS NOT REIMBURSABLE UNDER SECTION 4.2D OF BUREAU OF THE BUDGET CIRCULAR NO. A-56. HOWEVER, WHEN THE COST OF THE TITLE INSURANCE IS INCURRED BY THE PURCHASER FOR THE PROTECTION OF THE LENDER IT IS REIMBURSABLE IF, IN THE AREA INVOLVED, IT IS CUSTOMARILY PAID FOR BY THE PURCHASER. THE INFORMATION TRANSMITTED WITH YOUR LETTER IS TO THE EFFECT THAT IN THE COUNTY OF MENDOCINO, CALIFORNIA, IT IS CUSTOMARY FOR THE PURCHASER TO PAY THE TITLE INSURANCE ON THE PROPERTY HE ACQUIRES. THIS INFORMATION HAS BEEN CONFIRMED BY THE FEDERAL HOUSING ADMINISTRATION IN SAN FRANCISCO. MOREOVER, WE ARE ADVISED BY THAT ACTIVITY THAT THE STANDARD TITLE POLICY IN QUESTION "IS ISSUED AFTER A CAREFUL SEARCH OF PUBLIC RECORDS AND THE TITLE COMPANY INSURES THE OWNERSHIP OF THE LAND.' THUS UNDER THE CUSTOM OF THE AREA NOT ONLY IS THE POLICY REQUIRED FOR THE PROTECTION OF THE LENDER BUT THE COST THEREOF REASONABLY MAY BE REGARDED AS A CUSTOMARY COST OF SEARCHING TITLE WHICH IN MENDOCINO COUNTY IS PAYABLE BY THE PURCHASER. AS SUCH, IT IS REIMBURSABLE UNDER SECTION 4.2C OF BUREAU OF THE BUDGET CIRCULAR NO. A 56. ACCORDINGLY, THE VOUCHER WHICH IS RETURNED HEREWITH MAY BE CERTIFIED FOR PAYMENT IF OTHERWISE CORRECT.