Title Insurance Protection

Title Insurance Protection Is Required By All Lenders

Gustan Cho Associates are mortgage brokers licensed in 48 states

In this article, we will cover and discuss title insurance protection that is required by all mortgage lenders. We will cover what Title Insurance Protection is and why mortgage lenders require title insurance protection. Title Insurance Protection insures that the “record” title is good subject only to the exceptions expressly set out in the title insurance protection policy. In the following sections, we will cover title insurance protection. We will cover why all mortgage lenders require title insurance protection and why mortgage borrowers pay for title insurance.

What Is Title Insurance?

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It also insures against certain matters which do not appear on the record, such as the following:

  • forgery
  • identity of parties
  • incompetence and negligence of former owners
  • the interest of missing heirs
  • status of individuals not having the “right” to sell property
  • other flaws in the title of the property

Title Insurance Protection Protects Lenders and Owners

All lenders require a clean title before the mortgage loan underwriter issues a clear to close. Most mortgage loan closings are closed at title companies. The title company agent conducts the closing. The title company insures that the title to the property is clear of any and all liens. Guarantees there are no clouds on title to the subject property.

What Does Title Insurance Protection Cover?

In the event, that there are liens on the title and it does not appear until after the closing of the property, then it is the title company that insures this. So the title company needs to clear up and liens to the property. Title searches are extensive. Third-party firms are contracted when reviewing titles to the properties in question. In this article, we will cover and discuss Title Insurance Protection Required By All Lenders.

Owners of Title Insurance Protection

What does the title Insurance Cover mean

The standard owners’ title insurance policy and standard mortgage policy are based on public records of the recording district in which the land is located. It does not insure against matters which would only be disclosed by actual inspection or survey of the property. It does not insure against certain matters not shown by the public records such as the following:

  • unrecorded easements
  • liens or money obligations
  • unrecorded utility rights of way on public or private roads
  • community driveways and other types of encumbrances
  • or against the rights or claims of persons in possession of the property which are not shown by the public records

Upon application, the issuing company may specially cover matters which are disclosed by a physical inspection. And/or a survey of the property, subject to any exceptions which the inspection will determine to be proper. An additional risk premium is charged for this type of coverage. Insurance of this kind is called extended coverage


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