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FREQUENTLY ASQUED QUESTIONS

  1. Why do I need Title Insurance?

It's helpful to understand what "title" is. When you purchase a piece of property, you are not purchasing the land itself, but the right to possess and use the property. This allows someone other than the owner to own an "interest" in the property, for example a mortgage. Title insurance protects against "interests" like these that already exist that could harm your ability to possess and use your property. If, for instance, there was a mortgage on the property that a title search did not discover, title insurance would protect you against that "interest," ensuring you do not suffer loss as a result.

   2.What Are Some Examples of Title Issues?

 

  1. A fire destroys only the house and improvements. The ground is left. A defective title may take away not only the house but also the land on which it stands. Title insurance protects you (as specified in the policy) against such loss.

  2. A deed or mortgage in the chain of title may be a forgery.

  3. A deed or a mortgage may have been signed by a person under age.

  4. A deed or a mortgage may have been made by an insane person or one otherwise incompetent.

  5. A deed or a mortgage may have been made under a power of attorney after its termination and would, therefore, be void.

  6. A deed or a mortgage may have been made by a person other than the owner, but with the same name as the owner.

  7. The testator of a will might have had a child born after the execution of the will, a fact that would entitle the child to claim his or her share of the property.

  8. A deed or mortgage may have been procured by fraud or duress.

  9. Title transferred by an heir may be subject to a federal estate tax lien.

  10. An heir or other person presumed dead may appear and recover the property or an interest therein.

  11. A judgment or levy upon which the title is dependent may be void or voidable on account of some defect in the proceeding.

  12. Title insurance covers attorneys’ fees and court costs.

  13. Title insurance helps speed negotiations when you’re ready to sell or obtain a loan.

  14. By insuring the title, you can eliminate delays and technicalities when passing your title on to someone else.

  15. Title insurance reimburses you for the amount of your covered losses.

  16. A deed or mortgage may be voidable because it was signed while the grantor was in bankruptcy.

  17. Each title insurance policy we write is paid up, in full, by the first premium for as long as you or your heirs own the property.

  18. There may be a defect in the recording of a document upon which your title is dependent.

  19. Claims constantly arise due to marital status and validity of divorces. Only title insurance protects against claims made by non-existent or divorced "wives" or "husbands."

  20. Many lawyers, in giving an opinion on a title, protect their clients as well as themselves, by procuring title insurance.

  21. Over the last 24 years, claims have risen dramatically.

 

                   As you can see, there are a myriad of potential title issues that warrant protection.

​     3. Can't we clear up title issues beforehand?

Ideally, we would be able to clear up all title issues before closing. Unfortunately this is not always realistic. At times people may mortgage their property, have undiscovered liens, or other issues that a title search simply cannot discover. Furthermore, a title search might not discover fraudulent sales, liens or mortgages. One of these issues can completely ruin your ability to enjoy your property. For that reason, it's simply not worth the risk of relying on clearing every issue beforehand.

    4.How Much Does Title Insurance Cost? What Does it Cover, Specifically?

The cost varies, depending mainly on the value of your property. The important thing to remember is that you only pay once, then the coverage continues in effect for so long as you have an interest in covered property. If you should die, the coverage automatically continues for the benefit of your heirs. If you sell your property, giving warranties of title to your buyer, your coverage continues. Likewise, if a buyer gives you a mortgage to finance a purchase of covered property from you, your coverage continues to protect your security interest in the property.  In the event of a covered matter affecting your title, your insurance policy may protect you in various ways including: (1) Defending your title, (2) Bearing the cost of settling the covered matter, or (3) Paying you for the loss due to the covered matter. 

    5.What am I signing at the closing?

Several important documents must be signed at closing. The sellers will sign the deed transferring the property. Both parties will sign settlement statements showing their balance in the transaction and any amounts they were required to bring to closing. If there is a mortgage, the buyers will sign the security instrument securing the lender's loan, as well as other documents the lender requires to be signed. Finally, both parties will sign documents for the title company, including a privacy policy protecting their information.

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