Title Insurance Information
What is Title Insurance?
Title insurance is insurance on the title to property that protects the lender or homeowner in case of title defects. In other words, your policy is an assurance of your ownership interest.
What are the Different Types of Title Insurance?
There are two different types of title insurance:
A lender's policy
An owner's policy
In most cases, mortgage lenders insist on receiving a lender's policy. It protects the lender against title defects that might affect the security of the mortgage loan. It also gives the lender a valid lien on property owned by the borrower in the case of foreclosure. The lender's policy insures only the lender - it does not protect you.
An Owner's Title Insurance policy protects you from defects or errors in recorded documents. In addition, it insures you against title defects not shown in public records such as:
- Undisclosed Heirs
- Mental Incompetence
- Name Confusion
•· Fraud or False Representation
•· Defective Deeds
•· Marital Rights
•· Execution by Minor
Why Do I Need Title Insurance?
Careful title examination will not protect you from these types of errors. Nor will a review of the property's ownership history, or the lender's policy. Only an Owner's Title Insurance policy will give you protection against title defects, many of which could result in loss of title to your home.
If a valid claim is made against your title, and you do not have title insurance, you are responsible for all of the costs including attorney fees, court costs and any payment required to resolve the claim.