Title Insurance

TITLE INSURANCE     (Under review)

In my opinion you, as a Buyer, you need Title Insurance.I have heard many horror stories justifying the need for Title Insurance.

Owner’s title insurance protects a property owner from the danger or probability of loss of their equity due to defects in the title to their real property.

I have heard too many horror stories to think otherwise. You can get two levels of coverage. I strongly recommend the broadest possble coverage.There is a one-time fee for this policy that is usually paid at the time of purchase and the policy is generally issued for the purchase price of the property.

Today there are numerous cash purchases in which case there is no lender that will bring up the issue of title insurance. Cash buyers need to make certain that they get this protection!

It is important to understand that owner’s title insurance is different from lender’s title insurance. The lender’s title insurance policy protects the lender only and is based on the amount of a loan. On the other hand, owner’s title insurance is for the benefit of the owner and it protects the owner and the owner’s heir(s) for the period of their ownership of the property.

In Georgia, as recently as a few years ago, one of the largest counties in the state suffered a breakdown in its recording system and lost a high volume of documents submitted for recordation. As a result, the county had to undertake an elaborated forensic reconstruction effort to recover to record the documents that were lost or destroyed.

There are very few lenders in the country that will make a loan without requiring that the borrower purchases a lender’s title insurance for at a minimum the face value of the loan. From the lender’s perspective, a title defect is a business risk that the lender is unwilling to absorb. Obtaining coverage under a title insurance policy protects the insured against claim under the title policy. If there is a claim on the policy, the title company will mount a defense on behalf of the insured and if the need arises, among others, the valid claims of third parties will be paid by the title insurance company on behalf of the insured.

In connection with issuing title insurance policies,the public records are searched for a minimum period of fifty years to establish what is commonly called a “chain of title.” The examiner of the title reviews all the transactions affecting every ownership interest or “link” not only to identify the transactions connected to the property but also to identify hidden defects within the “links” of the property. Needless to say, a chain of title is only as good as its weakest link.

The following are examples of some of the most common defects that may exist in a chain of title; improperly executed documents; another person owns an interest in the property; evidence of fraud, forgery or duress; defective recording; undisclosed restrictive covenants; liens due to security instruments; judgments, tax or special assessments or homeowner’s association dues or assessments.

DOES A BUYER OF A FORECLOSURE IN COBB COUNTY NEED TITLE INSURANCE?

First of all, if the Buyer of a Foreclosure in Cobb County is getting a loan the Lender will require Title Insurance.  It can only be purchased one time and that is at closing.  This will protect the Lender in case any issues, liens, or discrepancies show up later down the road.

Here are a few true to life examples.  A Buyer closed on the house.  The closing attorney did not close on the Seller’s Home Equity line.  The Seller kept spending and charging on the Home Equity line to the tune of $50,000.  Then they put a lien on the house even though the current owner had nothing to do with the loan. This was also three years after the purchase.  What do you do?  The new owner had title insurance, the lender had title insurance and the problem was resolved through the title company.

Second example, a foreclosure can cancel all liens on a property.  But what if a lien shows up after closing?  In one case a builder filed a $90,000 lien and it wasn’t recorded until after closing.  Title Insurance was in place and problem solved.

Can you imagine the cost to the Lender or to the Owner if Title Insurance was not in place?

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