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Leona Said:

Should I purchase owner's title insurance if I buy a house?

We Answered:

Let's assume that the worst happens: You buy a house for $100,000 with an $80,000 mortgage. One day the door swings open and the person demands to know what you're doing in his house. Turns out your seller forged this guy's name on the documents and you don't have good title. You can sue the seller, but in the meantime the court will give the house back to the victim.

In that case your lender will file a claim under the Lender's Title policy, which is in the amount of the mortgage -- $80k -- and they're happy. If you don't have an owner's policy, you'll be out of the house and also your $20k. That's why your lender doesn't care if you have an owner's policy or not.

Insurance is a matter of a person's risk tolerance. If you want to skip the owner's policy and take the chance that there's nothing wrong with the title, that's an option. But the cost compared to the potential loss is pretty insignificant.

Franklin Said:

House title insurance coverage?

We Answered:

No, these look pretty standard.

A: This applies to tenants who are on the land as renters. They may have a legal right to be there, but it won't show up on the county land records.

B: This means that you should have gotten a survey done.

C: Covers any valid easements that may not yet have been on record when the policy was issued.

D: This covers the period that a laborer may have put on the home before your settlement.

E: If you sold off the mineral rights to your property, you won't be legally able to kick them off your land.

F: If you don't pay your taxes, the government will come and take your home.

Carol Said:

Do you really need title insurance on a foreclosed house?

We Answered:

Title insurance is more important on a foreclosed home than any other. There are numerous title insurance problems that can be associated with a foreclosure. I have seen many, many incorrect legal descriptions in foreclosures; creditors (thus lienholders) omitted from the foreclosure process; and even on one occasion the entirely wrong property was foreclosed. In order to save the most money you should ask for the re-issue rate if that is possible. HUD just purchased a policy of title insurance on the property in question, you may want to go back to that title insurance company for your policy.

Ron Said:

Title insurance on a house I already own?

We Answered:

You are confusing the Loan policy with the Owner's policy (and so are the majority of people who answered).

Your lender may require a Loan policy. If you want the loan, you will have to get the Loan policy.

Your Owner's policy from the original purchase would still be in effect.

You don't need to remove your husband's name from the policy as it makes no difference in coverage. His name simply turns into "The Estate of ....".

Clara Said:

House Title Insurance cover any possible Lien's on house in California?

We Answered:

Freddie Mac will guarantee the transfer of legal title, but you will still be required to purchase title insurance if you finance the property. Title insurance will cover you if any liens or claims arise after you purchase the house.

Generally speaking any previous lien-holders will be wiped out by the foreclosure process.

Normal title insurance policies cover most types of claims but they do not cover any encroachment should part of your property is encroaching on any neighboring land. To cover that you must purchase an ALTA policy and is expensive but is not required by the lender.