Tag Archives: Title insurance

What homebuyers need to know about title insurance

12 Sep

At some point during your homebuying process, the topic of title insurance is likely to come up. Like most types of insurance, title insurance is better to have and not use than need it and not have it available. But what is it, why do you need it, and how does it work?

 

What is title insurance?

 

Title insurance is a specialized insurance policy that protects you and your mortgage lender against mistakes made in a title search. If you find a home and there’s not a clear title to it, title insurance protects the bank – and you – if there’s a problem. A clear title means you’ll be able to occupy and use the property the way you want, and that you’re able to sell or pledge your property as security for a loan.

 

There are generally two types of title insurance: lender’s and owner’s title insurance. The lender’s policy is usually based on the dollar amount of your loan and protects the lender’s interests in the property against a problem with the title. The policy coverage decreases each year and goes away as the loan is paid off.

 

As its name suggests, the homeowner buys owner’s title insurance, which is in the amount of the real estate purchase, for a one-time fee at closing. It lasts as long as you own or have an interest in the property. Owner’s title insurance fully protects the homeowner in the event that there’s a problem with the title that wasn’t discovered during the title search. This type of insurance also pays for any legal fees involved in defending a claim to your title. Think of owner’s title insurance as helping to protect your equity, or your investment, in a home.

 

 

Title insurance is a safeguard against loss arising from hazards and defects already existing in the title. While claims on title insurance are rare compared to other types of insurance, they still happen and can be complicated legal issues to fix.

 

For example, one of the most common title-insurance claims is for the cost of back property taxes that the title company missed in researching a sale. Another example is when there’s not a clear title to the house, especially in cases of divorce. These scenarios might sound minor, but they can cost thousands in fees without title insurance.

 

Are you buying a newly built home and think there’s a clear title? Many consumers think they’re the first owner if they’re building a home on a lot, but it’s just as likely there were prior owners of the land. A title search will uncover any existing liens, and a survey can determine the boundaries of the property you’re buying for your new house.

WSJ: Consult a Title Professional

23 Apr
THE WALL STREET JOURNAL

Know Your Rights When Buying Real Estate

 

Consult a Land Title Professional and Purchase Title Insurance

 

WASHINGTON--(BUSINESS WIRE)--April 16, 2013--

As the spring home buying season begins, the American Land Title Association (ALTA) reminds consumers of the importance of title insurance when purchasing real estate and protecting their rights to property.

 

“For most Americans, our home is the single largest financial investment we make,” said ALTA president, Frank Pellegrini. “More importantly, it’s where we raise our families, share time with friends and live our lives. While ownership of our home may seem very straightforward, our rights to enjoy our property aren’t always as clear.”

 

Homeowners can purchase, for a one-time fee, an owner’s title insurance policy, which insures that consumers are protected in the case of known liens or encumbrances, such as unpaid mortgages, property taxes or child support liens.

 

“Title insurance professionals research the history of a property by scouring through public records to determine whether title problems exist,” said Pellegrini. “When a title professional finds an issue, they work to resolve it– typically without the consumer even knowing about it.”

 

ALTA, the national trade association of the land title insurance industry, encourages consumers to shop for their own title professional or title company. Homebuyers can also ask their real estate agent or lender for a recommendation.

 

 

 

 

 

About ALTA

 

The American Land Title Association, founded in 1907, is a national trade association representing nearly 4,200 title insurance companies, title agents, independent abstracters, title searchers, and attorneys. ALTA members conduct title searches, examinations, closings, and issue title insurance that protects real property owners and mortgage lenders against losses from defects in titles.

 


 

 
    SOURCE: American Land Title Association (ALTA) 
Copyright Business Wire 2013

Insurance News – American Land Title Association Introduces Set of ‘Title Insurance and Settlement Company Best Practices’ [Professional Services Close – Up]

19 Jan

Click on the link below:

 

Insurance News – American Land Title Association Introduces Set of ‘Title Insurance and Settlement Company Best Practices’ [Professional Services Close – Up].

One Desktop Shortcut You Really Need

26 Nov

If you are in the mortgage business, here is one shortcut you cannot miss:

http://www.titleutility.com/good-faith-estimate-gfe/?gateway=Tradition

It is a FREE title rate calculator which does not require registration or login.  Rates and fees are calculated by submitting the purpose of the loan and county in which the  property is located.

Another handy feature of Tradition’s website, www.TraditionTA.com, is the online order form.  It is a user-friendly page, and you will receive a friendly personal response from the Tradition staff in just a few minutes, confirming your order.

Check it out!

FYI – The History of Title Insurance

15 Jun

Prior to the invention of title insurance, buyers in real estate transactions bore sole responsibility for ensuring the validity of the land title held by the seller. If the title were later deemed invalid or found to be fraudulent, the buyer lost his investment.

In 1868, the case of Watson vs Muirhead was heard by the Pennsylvania Supreme Court. Plaintiff Watson had lost his investment in a real estate transaction as the result of a prior lien on the property. Defendant Muirhead, the conveyancer, had discovered the lien prior to the sale but told Watson the title was clear after his lawyer had (erroneously) determined that the lien was not valid.

The courts ruled that Muirhead (and others in similar situations) was not liable for mistakes based on professional opinions. As a result, in 1874, the Pennsylvania legislature passed an act allowing for the incorporation of title insurance companies.

Joshua Morris, a conveyancer in Philadelphia, and several colleagues met on 28 March 1876 to incorporate the first title insurance company. The new firm, Real Estate Title Company and Insurance of Pennsylvania, would “insure the purchasers of real estate and mortgages against losses from defective titles, liens and encumbrances,” and that “through these facilities, transfer of real estate and real estate securities can be made more speedily and with greater security than heretofore.”

Morris’ aunt purchased the first policy, valued at $1,500, to cover a home on North 43rd Street in Philadelphia.