Even though a thorough title search is performed, the Title Insurance Policy protects against hidden defects which do not show up on the title search.
There are two types of title insurance.
If someone initiates a claim against your title, an Owner’s Title Policy provides you with a legal defense. If your title should fail, the insurance reimburses you the equity in your home up to the value of the policy. The Owner’s Title Policy protects your investment as long as you own the property.
You wouldn’t consider purchasing a home without also purchasing a Hazard Insurance Policy to protect against fire. If a home is destroyed in a fire, you can always rebuild. If you lose the home because of a defect in the title, you lose everything.
In order to provide the best coverage in any situation, Origin Title and Escrow issues lender and owner policies through several title insurance companies.
Origin Title also offers enhanced policies that protect the owner against post-closing events that could affect ownership
The extra insurance provided by an enhanced policy covers risks such as:
Perhaps the two most frequent claims are when a neighbor builds a structure encroaching your land or when your land is damaged by someone else using their easement. Enhanced policies cost a little bit more than the standard policies, but the peace of mind it provides is well worth it.
What is a Title Search?
Before any real estate loan closing, a title search is performed.
A title search is a careful examination by an objective third party of all public records that involve title to a specific property.
The purpose of the search is to verify that there are no liens or claims against the property, other than those claimed and disclosed during the current transaction.
A title examination confirms that all former owners have formally given up their rights to the property.
Title searches typically include documents filed during the previous 50 years.
The person conducting the search looks at items such as past owners and deeds, wills, trusts, mortgages, judgments, and other liens.
Why is it required?
Real estate rights are protected by many laws. The owner, the owner’s family and heirs have clear rights or claims relating to the property being sold. Other entities could also have an interest in or a lien upon the property:
The real estate may be sold without the knowledge of the party having a claim to the property. Or, real estate could be purchased without the purchaser having any knowledge of these claims.
Whether the buyer knows about these rights or not, they remain attached to the title to the property until they are extinguished.
These are a few of the more than 30 lenders who have approved Origin Title for residential loan closings on their behalf.
Since 2003, John C. Bennett has performed thousands of closings.