IS THE TITLE CLEAR?

Buying real estate is unlike other purchases. There may have been a long line of past owners, any of whom could still retain some legal hold on the property — or claims on the property made against previous owners which remain unsatisfied. Therefore, when you purchase a property, you should be thoroughly assured that the title to it is free and clear of claims or encumbrances.
How is this done? Usually by an attorney who indexes all recorded papers affecting the title, listing them in chronological order. A synopsis of the documents is called the Abstract of Title. This is what is examined to determine whether any defects exist.

The attorney for the lending institution will examine the title and certify to his client whether the title is clear or not. But this is for mortgage loans purposes only. It is no assurance to the borrower that this title is free from encumbrances. The buyer should retain his own attorney for adequate protection.