Maybe the better question to ask is who is best equipped to manage as much of your risk as possible.  We live in a world where specialization rules the day, both in our personal and business lives.  There are lots of questions, and there are lots of highly skilled people ready to deliver answers to those questions.  In managing your personal health, you probably see a General Practitioner and any number of specialists.  In your job, you have Operations processes, Production processes, Quality processes, and Compliance processes.  This reality is both a blessing and a curse.  The upside is knowing you can go to a very specific place to access a very refined knowledge base.  The downside is you may have to go multiple places to get solutions to any problems you may face.  This is another way of saying that institutional knowledge lives in silos, and the help available to you will often stop at the door.  Wouldn’t it be nice to have somewhere to go where multiple risks are understood, and managed, in one place?

Let’s talk about replacement title policies.  Why do investors need replacement title policies?  Why is title insurance so important to begin with?  Ryan Peterson, our President at Grid151, does a great job answering this latter question in this post. Click Here to Read 

But long story short, a title policy ensures that you, as the original lender, and any subsequent assignees have free and clear title for your lien at the date of origination of the security instrument.  No lien can take precedence over your mortgage.  This sounds pretty simple, but the expertise in the title world is anything but – it’s a niche skill set in our industry that requires exceptional attention to detail and the ability to assess and mitigate an innumerable number of risks that can affect your lien position.

Now, why are title policies so important on the secondary market?  They are important because, similar to risk in a lot of other areas, the risk compounds.  Repurchase risk is added to lien position risk on the basis of what are typically multiple stipulations of the sale contract – the side-letter list of exceptions required to be held in the custodial file and the “clear and marketable” title portion of the Reps & Warrants agreed upon between buyer and seller.

Essentially, it can be very tough to sell a loan without a title policy being provided to the purchaser.  If you get the loan sold but can’t produce the title policy within the contractual timeframe, you are now reabsorbing the lien position risk all over again when you bring the loan back onto your books.  And, because of any number of reasons that the title policy isn’t present at the time of sale – it wasn’t required at the time of closing, it never initially made it to the collateral file, it went lost, or perhaps the issuing agent is no longer in business to re-provide it to you years after origination of the loan – the need for a “replacement” title policy takes center stage.

With a replacement title policy, you can insure the loan, with the same coverage (and the same diligent risk assessment for your lien) that you would have received if title insurance for the loan was ordered at the time of origination.  Repurchase risk?  Say goodbye.  Clear and marketable title?  Say hello.  These things matter even if you repurchase the loan initially and go forward with selling it a second time.  You are solving a problem that you WILL have to solve at some point.

Now here is where Grid151 mitigates your title risk in the secondary market in a way that every other vendor operating in this space simply cannot do for you.  And this gets back to why it is nice to have somewhere to go where multiple risks are understood, and managed, in one place.  Our Investor Services team works hand-in-hand with our title team at Westcor Land Title Insurance Company, the number one independent underwriter in the nation.  We understand title insurance, and title risk, like no other vendor operating in the secondary market.  We work in the same space, both literally and figuratively.  We share expertise with each other, and we have a more well-rounded knowledge base as a result.  We understand every facet of clearing title, but we understand how to clear all of the other collateral exceptions created by your loan sales as well.

There is no one else you can reach out to that will offer you so many different, and specialized, answers under one roof.  We have title experts that write insurance on a regular basis working 15 feet away from investor services experts who can clear every other collateral exception under the sun for you.  You simply won’t find that level of expertise anywhere else.  The help available to you?  It doesn’t stop at the door here.  In life, they often say that one door opens as another one closes.  At Grid151, we have multiple doors opening up to you at once.