Put simply, the lender’s attorney represents the lender, not you.
You and your lender share some but not all the same interests. The lender’s attorney performs a “title examination” at the Registry of Deeds to make sure you are purchasing “good, clear, marketable title” to the property. This protects the lender’s interests as well as your own. You want to be sure there are no defects in the chain of title to the property, and the lender wants to be sure the property is worth at least as much as you are borrowing to purchase it. Why? Because if you default and the lender has to foreclose, it wants to recoup its money. The lender’s attorney will “certify” that the title examination reveals “good, clear, marketable title.”
In order to protect itself if the attorney is mistaken, the lender will require you to purchase “title insurance,” an insurance policy with a one-time premium that will pay to remove any missed defects in the title to the property. The lender’s attorney will also pay off any of the seller’s mortgages or liens from the proceeds of your purchase price.
That’s about it. The lender’s attorney doesn’t get involved in a dispute the terms of your P&S. S/he will have you sign several documents stating that problems with the condition of the property (such as lead paint or UFFI foam insulation) are your problems, not the lender’s. If a dispute arises between you and the lender, its attorney will not help you. If the attorney works for a busy “conveyancing” office, s/he won’t take the time to explain thoroughly everything you are signing at the closing. In fact, often the closing will be handled not by the attorney but by a paralegal.
In sum, you need an attorney focused on YOUR interests to help you make informed decisions about the OTP, the P&S, and the closing.
Steven B. Rosenthal of The Rosenthal Law Firm is on your side. Click here to call him today for a free consultation.