The Residential Real Estate Crash Index Message Board

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Strategies & Market Trends : The Residential Real Estate Crash Index

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To: Tommaso who wrote (15372)	12/8/2003 10:20:52 AM
From: Tradelite	Read Replies (1) of 306849

<<percentage of titles that are ever challenged>> I've seen figures quoted from time to time showing that, in some states during certain years, more was paid out in claims than was collected in title insurance premiums. We had a local case that was pretty bad involving a small-time developer who forged a deceased landowner's signature on a contract and started ripping down trees and bulldozing the site before the owner's heirs knew what was happening. This type of insurance can prove useful in many ways that most people can't or don't anticipate (such as forged signatures on past deeds or unknown heirs who pop up out of nowhere and lay claim to a property), so I could never find myself recommending AGAINST buying the optional owner's policy. A policy protecting the lender is not optional--don't know of a single lender which doesn't require it. In my opinion, the buyer should definitely buy the optional owner's policy in certain circumstances--such as when purchasing newly developed property, or when purchasing property next to a country club or similar commercial entity which could always afford lawyers to outgun you in a dispute over boundary lines or land use. Buyers can sometimes save money when purchasing title insurance by determining if the present owner has a recent policy which could simply be "recertified" and updated in the buyer's name, without another full-blown title search. This is also true when refinancing in many cases. It's literally impossible for a lay person or prospective buyer to do a full-blown title search of a property on his own. The main purpose of the insurance is to protect against things which don't show up in a title search and can't be known. My biggest problem with title insurance is that the buyer seldom understands what he's getting in a particular policy, and no one volunteers to explain the policy coverage well enough. Fortunately, few people have to use the policy, so this ignorance is usually bliss, I suppose.

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