|
Title Insurance
Protecting The American Dream
One Home At A Time
View the title insurance video.
Chapter 1: Introduction
Man walking/talking:
No the lien isn’t expired, it’s still valid.
Women at filing cabinet:
Well it’s right after the break in the chain of title so let’s see what’s here.
I checked the probate file for heirs but P.L. Smith isn’t Paul Smith it’s Patricia Smith. (Back to Top)
Chapter 2: What is Title Insurance?
Narrator:
The joy of home ownership there’s really nothing like it and the one group whose sole purpose is to protect your right to the ownership of your property is the title insurance industry. But while most American home owners have title insurance protection, few know very much about it and consider the fact that the entire reason the title insurance industry exists is to protect our ownership of the largest purchase any of us are likely to make in our lives. So maybe its time we learn a little more about it.
Well first, title insurance isn’t exactly like other kinds of insurance. You pay for it just once when you’re buying a home and its coverage stays as long as you or your heirs own the property whether its 5 years or 105. But what we really makes title insurance different is that it’s as much a process as it is a product. The product, the title insurance policy, stays with you to protect you after you purchase your home. But the process that leads to that policy is detailed, intricate and often intense. Depending on where you live, title work may be performed by a title insurer, title agent or an attorney.
(Back to Top)
Chapter 3: How it Works
Narrator:
Every property starts out with a bundle of rights that its owner can expect to enjoy but over time with each new owner things can happen that challenge those rights. It’s the title professional’s job to uncover anything that might affect your right of ownership. The process begins when you or your real estate agent, mortgage lender or attorney requests a preliminary title search. Title company experts then search public records in the local county or in their own information store houses called title plants. This meticulous process can sometimes involve thousands of pages of information and maps all from public record information containing millions of records on vast numbers of properties. These records include recorded documents such as judgments, liens, taxes, utility assessments, special taxes, the list goes on. A detailed report of each item is then written and a preliminary title report is issued. Remember that the title professional does this work well before you buy your home. All to help you make sure that your transaction can move forward smoothly.
(Back to Top)
Chapter 4: What are my Risks?
Narrator:
Next the title professional steps in to help make sure that any title issues that came to light in the search are resolved so that your transaction closes on time. For example, the property you’re buying may have changed hands many times and with each new possession things like refinancing, tax liens, law suits, boundary encroachments or the marriage, divorce or the death of an owner might have changed your rights. Imagine that a previous owner had an addition built on your home but never paid the contractor who did the work. By having title company experts find this and raise the flag before you buy that unpaid bill can be taken care of by the previous owner. Without that information, you might very well have moved into that dream home only to find that you are responsible for a contractor’s bill. What else might turn up in a record search that could affect your ownership? Well the title professional might find that an old unpaid tax has caused a lien to be filed on your home. Again, leaving you to face these charges if he or she hadn't found them first. Improvements to the property, such as fences and garages might be found to be encroaching on a neighbors land. Something that you'll want to have addressed before you buy. Or perhaps a previous owner allowed access to the property by a utility company something that could affect the way you use your property.
So how many title searches reveal a problem? It’s an astonishing 25%. Just imagine finding out about an issue that could jeopardize your ownership of your home after you move in. Without the process that title experts perform up front, you may never know if you’re the 1 in 4 with a problem until it’s too late. But even the most thorough title search doesn’t mean that problems will never arise. That leads us to the product. (Back to Top)
Chapter 5: The Product
Narrator:
While many home buyers may not be aware of the work title experts do during the process, most do recognize their product. The title insurance policy. After reporting and playing a hand in resolving issues found during the search and reporting process, the insurer then provides an owners policy of title which essentially guarantees their work. The policy also guarantees that new future challenges covered in your policy will cause you great financial loss or hardship. Because if a covered problem does surface, your title insurer will be there to defend you and handle the cost incurred including legal fees. But, if the title professionals do a thorough job during the search process how could problems arise later? Simply, the best title search performed by the most experienced and capable experts cannot insure that title hazards don't exist and that’s because some problems aren’t revealed in public records at all. Years ago there may have been an honest mistake in recording documents or there might even have been a forged deed that revokes the ownership of the property. These hidden defects can affect the property title but aren’t revealed in the public record so the searcher couldn't have found them.
What kind of hidden defects? Well, for example a one time property owner thought to have passed away years before, might show up alive and well and claimed that his relatives had no right to the ownership of the property and no authority to sell it to the new buyer. Another example, neighbors who once provided the only road access to a property suddenly decided to deny that access, claiming the right of cross the property was abandoned by an earlier owner. Also, forgeries have caused problems when a new owner has learned that the signature provided by the prior owner during the sale was actually forged and the true owners wanted their property back. Or sometimes simple errors in tax records can come back to haunt a new owner. Protection against these hidden title flaws is one of the features that gives title insurance its great value. When a problem like that surfaces during your ownership of a property, a title professional corrects it or compensates you for your financial loss. (Back to Top)
Chapter 6: Policy Types
Narrator:
Remember, in addition to clearing title problems and paying valid claims, title insurance pays the cost in defending against an attack on title. Without title insurance, you the owner, could be liable for legal fees even if you win the case. Mortgage lenders also benefit from title insurance. After all, they have a financial stake in your property too. Now because of that there are 2 types of title insurance policies: One for owners and owner for lenders. While an owners title insurance policy covers you in amounts equal to the purchase price of the property a lenders policy is in an amount equal to the loan and declines as you repay the loan. You have to keep in mind that the lenders policy only covers any lost suffered by the lender, it doesn’t protect you. That’s why it’s so important to have a separate owner’s policy.
(Back to Top)
Chapter 7: Security
Narrator:
Land title insurance is provided by companies that were created to help protect people’s rights to their properties. They are regulated closely by public authorities in every state. And are required to maintain substantial financial reserves. There rated according to their ability to pay out claims. In recent years, members of the American Land Title Association have spent millions of dollars to build technology that speeds the title process. A benefit to everyone involved in a real estate purchase.
(Back to Top)
Chapter 8: Our Commitment
Narrator:
More than 125 years ago, the first title insurance company was formed to help protect the rights of real estate buyers. Today, the professionals who carry out this process and provide their product continue to stand by the buyers they serve.
(Back to Top)
 Try our Quick Title Insurance Quote for purchase or refinance.
|