Homeowners

Owning real estate is one of the most precious values in this country. You want the assurance that the property you are buying will be yours. Other than your mortgage holder, no one else should have any claims or restrictions against your home.

A title insurance policy is issued after a careful examination of the public records. But even the most thorough search cannot absolutely assure that no title faults are present. In addition to matters shown by public records, other title problems may exist that won’t be disclosed in a search at the time of purchase. A title insurance policy eliminates any risks and losses caused by faults in title from an event that occurred before you owned the property.

Title insurance is different from other types of insurance in that it protects you from a loss that may occur from matters in the past. Other types of insurance such as auto, life, or health cover you against losses that may occur in the future for a monthly fee. You only pay a one-time premium for a title insurance policy that remains effective as long as you own the property.

A lender’s policy, also known as a loan policy or a mortgage policy, protects the lender against losses 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 sale.

This policy only protects the lender’s interest. It does not protect the purchaser. That’s why obtaining an owner’s title insurance policy is so important.

An owner’s policy protects you, the purchaser, against a loss that may occur from a fault in the ownership or interest you have in the property. You can protect the equity in your new home with a title policy. Here are three things an owner’s policy provides when it comes to your property rights and your peace of mind.

• Protection from financial loss due to demands that may be charged against the title to your home, up to the cost of the title policy.
• Payment of legal costs if the title insurer has to defend your title against a covered claim.
• Payment of successful claims against the title to your home covered by the policy, up to the cost of the policy.

As a purchaser, you will need evidence that your investment in your property is free of title defects. Without title insurance, you may not be fully protected against errors in public records, hidden defects not disclosed by the public records, or mistakes in examination of the title. As a result, you may be held fully accountable for any prior liens, judgments, or claims brought against your new property. Title insurance is a guarantee that you are obtaining a clear title to your real estate, unencumbered by any legal attachments that might limit or jeopardize ownership. If a defect is discovered, your title policy ensures that you will be defended at no cost against all covered claims up to the amount of the policy.

The premium for a title insurance policy is only paid once and is often included in a transaction’s closing costs. The cost depends upon the purchase price of the property. The policy amount must be equal to the purchase price.

Here is a list of some of the issues that could arise with your new property:

• Undisclosed heirs
• Forged deeds, mortgages, wills, releases and other documents
• False impersonation of the true landowner
• Deeds by minors
• Documents executed by a revoked or expired Power of Attorney
• False affidavits of death or heirship
• Probate matters
• Fraud
• Deeds and wills by persons of unsound mind
• Conveyances by undisclosed divorced spouses
• Rights of divorced parties
• Deeds by persons falsely representing their marital status
• Adverse possession
• Defective acknowledgments due to improper or expired notarization
• Forfeitures of real property due to criminal acts
• Mistakes and omissions resulting in improper abstracting
• Errors in tax records