Title Insurance is a product that the general public is not familiar with, and yet it plays a very vital part in the purchase – sale process as well as Refinancing your home.

Title Insurance eliminates many risks and losses caused by problems in the property title from an event that has occurred before you have owned the property.

Title insurance differs from other types of insurance in that it protects you from a loss that may have occurred in the past, where as other insurances cover you against losses that may occur in the future sometime. You also only pay a one-time premium and this protects you from risks on title issues for as long as you own the property.

There are two major forms of Title Insurance.

1. Lenders – the lenders policy protects the lender or mortgage holder, not the owner, from defects in title that result in a loss. Most lenders that sell their mortgages on the secondary market will require a lender title insurance policy for the loan they will give to you. With a lenders policy they are being assured of the quality of the title. By doing this, it minimizes the risk they take when lending you money.

2. Owners – As owners policy protects the property owner against losses that could occur from a deficit in ownership or interest you may have in the property.
A few examples of coverage include but are not limited to:

  • Forged documents
  • Unrecorded easements
  • Undisclosed liens of former owners
  • Fraud
  • False impersonation of the actual title holder
    • A few of the most common hidden risks that can cause a loss of title or create an encumbrance of the property
      • False impersonation of ownership
      • forged deeds, releases or wills
      • Undisclosed or missing heirs
      • Documents executed signed under intended or expressed power of attorney
      • Recording mistakes

Most New developments use Owners Title Insurance as a way of transferring title, but if there are still abstracts of title used to transfer a piece of property, owners title insurance is an option the purchaser may want to check into. At the closing table, the closer in our office will always offer the option of buying an owners policy and provide helpful information & process for the customer to base their decision on.

Federal law requires choice of Title Insurers The Real Estate Settlement Procedures Act (RESAA), 12 U.S.C. 2600, requests that all buyers & borrowers be given the choice of title insurance providers.