Title Insurance Saves the Day
You may think title insurance is an added expense that you don’t need when trying to buy a home. However, title problems do happen. The following are real cases where having an owner’s policy prevented significant loss.
A couple in Missouri purchased a home from their landlord. The landlord had purchased that home, along with several others, with the same loan. This was missed during the title search and instead of paying off the loan, the money was given to the landlord who did not use it to pay off the loan. The couple made their payments regularly, but the original lender started the foreclosure process and sent a letter to the couple notifying them the home was going to be auctioned. Because the couple had purchased title insurance when they bought the property, the title company paid off the loan and the couple were able to keep their home.
In another case, a couple purchased a home through a realtor. After their purchase was complete, a legal action was initiated by a couple who lived in a different city to prove they were the actual owners of the property. As it turned out, more than one document in the chain of title had been forged by a third party. While they did not get to keep the home, because the couple had purchased an owner’s policy, the title company gave them a monetary settlement to protect against financial loss.