Title Protects

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Analysis released by First American Financial Corp. finds that the role of title professionals in maintaining reliable and accurate property ownership records dramatically reduces estimated risk exposure in real estate transactions. Additionally, a study conducted by ndp | analytics shows expert title professionals spend approximately 22 hours to close a standard transaction and 45 hours for more difficult transactions.

ALTA CEO Diane Tomb discusses why title insurance is important on refinances to protect the property rights of the homeowner and the lender’s investment from any title defects discovered or risks that may appear years later. Unfortunately, the Biden Administration has overlooked the necessity of title insurance on refinance loans. It has proposed waiving lender’s title insurance on certain refinance loans, which would shift the responsibility of protecting property rights from experienced title companies to government-sponsored entities (GSEs).

Hani Levy and her husband, who owns a construction company, thought they were making an investment in their Fort Lauderdale, Florida neighborhood. But after spending $350,000 on an empty lot, they are now facing a real estate nightmare. Buyers should always consider purchasing title insurance. While most mortgage companies require this, the Levys purchased the land outright and may not have considered the option. Title insurance protects against any limitation in the title, including liens and sometimes easement challenges, depending on the context.

Title insurance can protect you from the financial impact that comes with a defective title. Let’s take a look at title insurance and how it protects you during a home sale.

Making homes more affordable for Americans is a worthy goal, but targeting title insurance—a one-time premium that is far lower than many other closing costs—would have the opposite effect, explains First American Chief Economist Mark Fleming. That’s because title insurers play a foundational but largely misunderstood role in the real estate industry: enabling the reliable transfer of property ownership.

Title insurance is significantly different from other lines of insurance. For a one-time fee paid at closing, title insurance provides homeowners protection for as they or their heirs own the property. Other types of insurance charge monthly or yearly premiums. The facts are clear: title insurance is essential to protecting homeowners and their most important investment both during the initial purchase of a home and refinancing – and it exists for a reason.

Just as homeowners insurance protects you financially if your home is physically damaged or destroyed, title insurance protects you if someone makes a claim against your property's title.

Here’s what you need to know about what title insurance: What it covers, how much it costs and whether you should buy it.

I am currently involved in a long process of buying a home from some investors who purchased it in foreclosure. The home closing has been held up multiple times, as the sellers are having a hard time getting liens off the property. That's not what made me glad for title insurance though, since the title company identified all of these claims and is requiring the sellers to clear them up before the purchase can be finalized.

Often misunderstood, title insurance is a product that comprehensively protects homeowners’ property rights and their lenders’ financial interest in a property. It is vastly different than other types of insurance because it is a one-time fee and title professionals do the majority of the work upfront to both examine title issues and rectify any problems found. That is why many homeowners thankfully don’t experience the challenge of a claim that threatens their homeownership – but if they do, title insurance is paramount to protecting their biggest investment. 

It is critical that new homebuyers and homeowners alike understand title insurance.