Schedule A of the commitment represents details of the transaction. Section 1 of Schedule A lists the types of policies that are going to be issued (Owner’s Title Policy and/or Lender’s Title Policy). When representing a lender, this portion of Schedule A should be reviewed to be sure that the names, the sales price and loan amount are shown accurately. Section 2 of Schedule A shows the type of interest that the buyer has or is going to acquire in the property, which in most loans should always be “Fee Simple.”
Section 3 shows who the legal owner of the property is after a search in the real property records. Section 3 is important for the lender to review to make sure that if the loan is not purchase money the names listed match that of the anticipated borrower(s).
Section 4 of Schedule A shows the legal description. When dealing with real property it is the legal description that controls the transaction, not the physical property address. Legal documents that are recorded at closing should always describe the property by the description found in Section 4. Banks should review this section to be sure what is shown here is what the Bank anticipates will be its collateral at closing.