To all you homeowners out there:

My bank is offering me and is paying for bank required title insurance.

My Realtor is recommending that I get an ADDITIONAL owner title insurance, which would run extra $800-900 at closing.

House was build in 1982. I am skeptical weather I really need it.

Should I get it? Or should the bank paid one be enough for any possible hidden problems?

Thanks!

No, you don't need additional title insurance. I've been in the mortgage business for a long time(15+ yrs.)... so believe me.... you don't need additional. The bank one is fine.

YES, YES, YES!!!!! Buy that owner's title insurance...it's worth every penny in peace of mind.

What if a defect in the title shows up years from now? ...after the house has appreciated significantly in value....the lender's title policy only covers the mortgage balance! What will protect your equity?

Answer: YOUR OWNER"S TITLE INSURANCE....buy it!

Forgery is the biggest cause of title insurance claims....what are you going to do if the piece of shit you bought the house from's ex wife bangs on your door one day?

You don't need it . It is practically 100% profit for the bank and provides you with little additional protection.

There was a case in connecticut a few years back. A spoiled rich brat in his 30s was asked to house sit his parents house while they went on a long trip. When they returned, not only had Junior sold everything in their house, he sold the house!

I thought it was a funny story and I asked my attorney about it. His reply was that was one of the few cases that the title insurance would have to pay out.

Title insurance in itself is very profitable. Extra title insurance is a windfall for the bank.

I mean, I think its worth if if you are buying a 50 year old house, with tons of previous owners, but even then...

The age of the house is immaterial...even new houses can have title problems....the builder bought the land from somebody. With new houses you can also have mechanics liens against the property by sub-contractors that may not have been paid. Especially nowadays with all the builders in financial trouble.

But, you're right, title problems are very rare...so it's not a huge gamble to skip the owners' policy.

Personally, I'll gladly spend hundreds to protect thousands....cheap peace of mind.

The only way supplemental title insurance would benefit someone is if the primary title insurance folds and there's no collectability if a problem arises. Problems have been known to pop up years after one has sold the property, whether it be with leins or mis-classed information. Depending on the price, it might be a good idea. I'd say if less than $100, pay it and sleep well. -§

§ Wrote:
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> The only way supplemental title insurance would
> benefit someone is if the primary title insurance
> folds and there's no collectability if a problem
> arises. Problems have been known to pop up years
> after one has sold the property, whether it be
> with leins or mis-classed information. Depending
> on the price, it might be a good idea. I'd say if
> less than $100, pay it and sleep well. -§


No, that isn't how it works. The Lender's title policy that you are required to purchase...insures only the loan amount. The optional Owner's policy insures the purchase price (some enhanced policies even cover subsequent appreciation).

So if you make a large down payment....you could lose it if someone successfully challenges the title.

But, I'm big believer in insurance...I pay over a $1000 a year for a 10 million dollar umbrella liability policy (home, auto, and boat). I can't believe how people drive around here like maniacs in cars with only a couple hundred grand (or less) of liability coverage. Hurt somebody and that pittance would be gone in no time...then they come after your assets.

Well, that's how it worked for me. I sold a property in 2001 where there was issues with the previous owners having mechanic's lein that went undiscovered during the previous sale. When I went to sell, the title search uncovered the lein for just over $500 owed by the previous owners where it prevented me from selling unless (1) I paid it or (2) I had my title insurance co. track it down to have it cleared. My settlement agent ended up doing all the leg work the day of settlement because I didn't find out about it until I was at the table signing away. To complicate matters, the original title insurance co. no longer was in business. In order to expedite, the settlement agent had used our supplemental policy that we took out at purchase to cover this lein as to not hold up our sale. I believe I paid only $80 for this back in 1997 through my primary insurance carrier. I then had to reschedule signing until the afternoon and all was well, except for my nerves ofcourse.

I agree with the umbrella policy. It's almost idiotic to not own one for at least $2MIL nowadays given its portability and the litigious nature of society, especially in NoVA. That's one reason why I shovel my sidewalks when it snows! -§

If it was 80-100-200 bucks, I'd say definetely get it. But since it's $800-900 of your cash, I'd say save your money.

Dear Kiev,

I think you should check this out and decide if you want to pay extra or not?

https://www.ctic.com/title_insurance.asp

This happens to be my title insurance company...
Hope it helps

It's for peace of mind and I believe you get a discount when you refi.

vaburbia.com

How about you dont buy the extra insurance and if something goes wrong sue the company that did the title search?

Dr Z Wrote:
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> How about you dont buy the extra insurance and if
> something goes wrong sue the company that did the
> title search?

Title insurance protects against UNRECORDED claims...things a title search won't turn up.

BUY IT!

One of my coworkers a couple years ago discovered (through an article in the Washington Post) that the person that he bought his house from in fact wasn't the person he said he was. He actually killed his family and brother, and impersonated his brother when selling my coworker the house.

Fast forward 5-10 years or so. Some lawyer finds out about this, and tries to take the house for one of the killed brother's kids. Huge legal battle ensues, dragging my coworker into court pretty often.

His title insurance paid the 6-figure court costs. If he had lost the house, the standard insurance policy would give him what they paid for the house 5-10 years ago, not its current value. As it turns out, they got to keep the house. He's been a strong proponent of title insurance ever since.

BUY IT! It doesn't just cover the house, it also covers the land your house is sitting on - which has been owned a lot longer than when your house was built. If there was a problem in one of the transactions 'way back when' and one of the descendants comes back to you claiming they actually own the land, the title insurance *protects you*.

Here's an article from the Washington Post: http://www.washingtonpost.com/wp-dyn/content/article/2007/08/31/AR2007083102374.html

Is it worh to buy the additional title insurance for a foreclosed property?

for example these foreclosed houses are abondned and the people who buy these house spends a lot of money to fix it up but the title insurance is only cover the base price that is the price the house was sold, so it it work to buy additional insurance ? can bank re take these forclosed home back from the new home owners ?

Don't forget to buy cloud insurance.

Do a little homework first. How many times has the house sold since 1982? How long have the current owners owned the house? Has the property ever been foreclosed on? Has the property been sold by an estate or an heir? Can you get a copy of the title bringdown that will be done for the lender, and if so how far back will they go?

Title companies are pretty good about writing owners policies to minimize what is covered. Common exclusions include zoning, flood plains, polution abatement issues, covenant violations and defects that show up in the title search. Someone mentioned forged signatures on deeds as one thing they do cover. I also know there was at least one instance where they got stuck when the settlement company failed to use the money paid at closing to pay off old mortgages.

rehan Wrote:
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> Is it worh to buy the additional title insurance
> for a foreclosed property?
>
> for example these foreclosed houses are abondned
> and the people who buy these house spends a lot of
> money to fix it up but the title insurance is only
> cover the base price that is the price the house
> was sold, so it it work to buy additional
> insurance ? can bank re take these forclosed home
> back from the new home owners ?

YES. DEFINITELY. Have you been reading the papers lately? Mortgage companies are getting hit all over for trying to foreclose on properties that they cannot show they own the mortgages on. They do not guarantee their titles. Most are either quitclaim or special warranty deed sales. Do you really want to buy some run down property at bottom dollar prices, put serious money into fixing it up, only to have some other mortgage company or some prior owner try to reclaim it because the last foreclosure was defective.

Also remember that with most policies you are actually getting two types of coverage. They are promising to pay you a sum of money if you lose out, but more importantly they usually also are offering to pay for the attorney that will defend against the claim.

Bill Wrote:
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> YES. DEFINITELY. Have you been reading the
> papers lately? Mortgage companies are getting hit
> all over for trying to foreclose on properties
> that they cannot show they own the mortgages on.
> They do not guarantee their titles. Most are
> either quitclaim or special warranty deed sales.
> Do you really want to buy some run down property
> at bottom dollar prices, put serious money into
> fixing it up, only to have some other mortgage
> company or some prior owner try to reclaim it
> because the last foreclosure was defective.
>
> Also remember that with most policies you are
> actually getting two types of coverage. They are
> promising to pay you a sum of money if you lose
> out, but more importantly they usually also are
> offering to pay for the attorney that will defend
> against the claim.

I second that motion. The documentation on most of the mortgages out there that were originated in the last five years are crap. Who knows how many liens were placed on the property prior to foreclosure and whether or not they were released? Cheap insurance really.

the policy the lender wants is a mortgagees policy and only protects the lender for the amount of the loan. You get no protection.

The owners' policy protects you and you can shop around to get a good rate on both.

Crack open the yellow pages and start dialing. Make sure the issuing company (not the local agent) has a good Best rating, otherwise the bank won't accept it.

Land America wrote a lot of policies around here and went bust a year or so ago. Another company took over their existing policies but it will be a hassle for their policy owners if they have a claim.

The special warranty deed you get from the seller will cover you for anything the seller did to the title but who wants to have to chase them. The title company will do that and cover for anything done by their predecessors in the chain.

This house is your biggest investment. You're getting property casualty insurance and paying an annual premium. Owners title insurance is a one time premium and is good forever; even after you sell this home and some later owner claims a predecessor in the chain put a cloud on the title, you're protected.