Title Insurance Examples Of Problems And Advice

Title Insurance Examples Of Problems And Advice



Title Insurance Examples of​ Problems and Advice
What is​ title insurance and why should any buyer get it​ when purchasing a​ home single family,​ townhouse,​ condo,​ apartment,​ or​ whatever format your home purchase takes? Doesn’t the​ attorney or​ settlement company handling the​ closing see to​ it​ that you​ have a​ clear title? Isn’t this just another way for someone to​ siphon a​ few coins off a​ real estate transaction?
Title Insurance
Title insurance prevents the​ property owner from suffering financial loss if,​ at​ any time during his ownership of​ the​ property,​ someone comes along who can show that they have full,​ or​ partial,​ ownership of​ the​ property instead. Every mortgage lender I’m aware of​ requires title insurance be purchased to​ cover the​ amount of​ the​ mortgage. They’re not in​ business to​ lose money.
A careful title search is​ done at​ the​ time property changes hands. on​ rare occasions mistakes are made anyway. Property can change hands in​ a​ number of​ ways including by deed,​ by will and by court action. Typically,​ these proceedings are recorded in​ different places. Searching the​ history of​ ownership to​ be sure nothing has fallen through the​ cracks is​ a​ tedious job that requires alertness,​ intelligence,​ and skill. Mistakes can happen. Fortunately they don’t occur very often,​ but they do happen.
A mistake of​ this kind happened a​ few years ago to​ some elderly friends of​ mine who owned a​ 136 acre parcel of​ farmland in​ Stafford County,​ Virginia. it​ had been the​ home place,​ the​ family farm. the​ family had 10 children who inherited it​ on​ the​ death of​ their parents. After they became adults,​ one child,​ a​ daughter,​ bought out the​ interests of​ each of​ her siblings. at​ her death,​ the​ property was conveyed by will to​ her three sons. One of​ her sons had died without a​ will which resulted in​ his widow and their 3 children gaining ownership of​ his one third interest per state law.
My friend is​ the​ widow. She and her brothersinlaw wanted to​ sell the​ property. the​ area had be​gun​ to​ develop and each of​ the​ three of​ them had significant health problems,​ so they decided an influx of​ cash would be welcome. the​ property was master planned,​ but not yet zoned,​ for multifamily use. Being subject to​ a​ rezoning complicated the​ sale,​ but the​ price reflected the​ change in​ use. When the​ title work was done,​ it​ was discovered that the​ heir of​ one of​ the​ 10 children was still shown as​ a​ ten percent owner of​ the​ property. Neither my friend nor her brothersinlaw had title insurance. if​ the​ heir would not sign a​ quit claim deed,​ they were stuck with an additional owner.
Actually,​ this happened not once,​ but twice with the​ same family group. in​ one case,​ the​ aunt remembered that her parent had been bought out and signed the​ quit claim deed. in​ the​ other case,​ a​ cousin either did not know or​ refused to​ acknowledge what had happened and ended up getting ten per cent of​ the​ proceeds.
My suggestion is​ that you​ purchase title insurance because lack of​ it​ could prove devastating. you​ make a​ down payment. you​ make monthly payments,​ an increasing portion of​ which is​ reducing the​ amount of​ principal owed. it​ is​ very likely that the​ value of​ your property will go up over the​ years. as​ time passes,​ these elements are likely to​ result in​ your home equity’s being your largest asset. Just how devastating would it​ be if​ you​ eventually discovered that someone else owned what you’d always thought was your home?
Do yourself a​ favor. When you​ buy a​ home,​ buy title insurance.
What if​ the​ home you’re purchasing is​ new? No one else could have owned it​ before you,​ right? Well,​ someone owned the​ land. as​ a​ matter of​ fact,​ the​ builder/developer probably had a​ construction loan on​ it,​ and they’re often released in​ groups of​ 10 lots at​ a​ time,​ so it’s possible a​ bank has an interest in​ your title. What happens if​ the​ bank goes bankrupt and you’re left trying to​ get a​ release from a​ trustee in​ bankruptcy?
Honestly,​ I’m not making this stuff up. I’ve seen this kind of​ thing happen. Do yourself a​ favor. Buy title insurance.




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