Title Insurance

During the real estate boom that occurred in the first part of this century, business was often carried out in a fast and furious mode in attempts to accommodate the volume. Concerns from that season include hurriedly prepared deeds, short cuts in title examinations, and last minute changes in the names of purchasers to facilitate loan approval.  Some of these issues are yet to surface as a problem, but could show up and become a calamity for unsuspecting sellers and buyers.  All of this coupled with the typical title problems that surface in the normal course of business, leave anyone purchasing real estate vulnerable and in need of protection.

In recent years, there have been many changes in the way that we view our assets and investments.  Following the implode of the real estate markets and the near topple of our financial markets, more and more of the titles to our nation’s real estate have been marred by title defects through improper foreclosures, flawed short sales, judgment liens, and other liens recorded in the land records.  Title insurance, to include a thorough title examination, is now a more critical component of asset preservation than ever before.  Unfortunately, not all title defects can be disclosed in a title examination.

In the past, purchasers of real estate relied on title insurance to protect themselves against the usual culprits, namely fraud, forgeries, missing heirs, unpaid taxes, and the like.  Currently we are seeing the impact of the circumstance of our economy in our land and title records across the country.  The affects of this recession will be reflected in the title documents to our real property for generations to come.

What could go wrong with a bank’s foreclosure?

  • Not all of the Owner’s of the Property Signed the Mortgage or Deed of Trust
  • One or More of the Owners of the Property were in Bankruptcy at the time of the Foreclosure
  • The Property Owner’s rights under the Servicemembers Civil Relief Act were Violated
  • Proper Notice was not Provided to Subordinate Lien Holders
  • The IRS has a Right of Redemption under an IRS Lien

What could go wrong with a short sale?

  • The Lender was Not Actually Paid the Amount Required to Release the Lien
  • Fraud was Committed in the Short Sale Process
  • Other Unreleased Liens on the Property

If you would like more information on title insurance, please feel free to click on the links below.

What does an Owner’s Title Insurance Policy Cover?

Here are just a few of the most common risks that can cause loss of title or create an encumbrance on title:

  • False Impersonation of the True Owner of the Property
  • Forged Deeds, Releases or Wills
  • Undisclosed or Missing Heirs
  • Instruments Executed Under Invalid or Expired Power of Attorney
  • Mistakes in Recording Legal Documents
  • Mistakes in Preparation of Legal Documents
  • Improper Foreclosure of a Lender’s Lien
  • Misinterpretations of Wills
  • Deeds by Persons of Unsound Mind
  • Deeds by Minors
  • Deeds by Persons Supposedly Single, but in fact Married
  • Liens for Unpaid Estate, Inheritance, Income or Gift Taxes
  • Unreleased Lender’s Liens
  • Fraud

Why does the Lender require a Title Insurance Policy for my property?

The loan policy protects the lender against loss due to unknown title defects. It also protects the lender's interest from certain matters which may exist, but may not be known at the time of the purchase or refinance.

However, a lender’s policy only protects the lender's interest. It does not protect the borrower or owner of the real estate. That is why a real estate purchaser needs an owner's policy, which can be issued at the same time as the loan policy, usually for a nominal one-time fee in conjunction with a simultaneous issue premium.

Can I Get More Protection?

ALTA Homeowner’s Policy (Enhanced) vs. Standard Comparison

There are few things more important than protecting your home.  Owner’s Title Insurance has been offered for more than 150 years, because even the best title search and examination cannot protect your equity and home from matters not appearing in the public records. 

The standard policy covers you for defects and liens in the history of your title through the date and time your Deed is recorded in the public records.  The ALTA Homeowner’s Policy of Title Insurance provides coverage for many additional risks, including some which might occur after the deed is recorded.

Below is a coverage comparison that will help you decide which policy is the best for you to protect your ownership in your home.

BOTH POLICIES INCLUDE:

 

Standard Policy

Enhanced Policy

Mechanic’s Lien Coverage

Yes

Yes

Third Party claims an interest in the title

Yes

Yes

Improperly executed documents

Yes

Yes

Pre-Policy forgery, fraud or duress

Yes

Yes

Non-recorded restrictive covenants

Yes

Yes

Defective recording of documents

Yes

Yes

Prior recorded liens not disclosed in the policy

Yes

Yes

Unmarketability of the title

Yes

Yes

Policy insures anyone who inherits the property from you

Yes

Yes

ADDITIONAL COVERAGES IN ENHANCED POLICY:

 

Standard Policy

Enhanced Policy

Policy insures the beneficiaries of your trust upon your death

No

Yes

Automatic increase in coverage up to 150% (not based on inflation)

No

Yes

Post Policy Forgery

No

Yes

Post Policy encroachment onto insured land

No

Yes

Legal right to ACTUAL vehicular and pedestrian access

No

Yes

Coverage for certain losses due to Building Permit violations (subject to a deductible and liability limits)

No

Yes

Coverage for certain losses due to zoning law violations (subject to a deductible and liability limits)

No

Yes

Coverage for certain losses due to existing violation of subdivision law (subject to a deductible and liability limits) 

No

Yes

Post policy structural damage from third party easement for mineral extraction

No

Yes

Violation of restrictive covenants identified in the Policy:

 

 

Resulting in loss of title

No

Yes

Resulting in loss from correction or removal

No

Yes

Resulting in loss of use where single family dwelling prohibited

No

Yes

Forced removal of existing structures that:

 

 

Encroach onto an easement identified in the Policy

No

Yes

Violate a building restriction line identified in the Policy

No

Yes

Encroach onto neighbor’s land (subject to a deductible and liability limits if boundary wall or fence)

No

Yes

For Comparison Purposes Only.  Both policies contain insuring provisions, conditions, stipulations, exclusions & exceptions as set out by the individual underwriter and the American Land Title Association.