What
is Title Insurance?
When someone
buys real estate, that buyer is purchasing title to the real estate.
The title purchased may be subject to rights and claims that others,
such as mortgagees, tenants, and holders of easement interests.
Title defects and encumbrances can have serious financial consequences
that may interfere with the buyer's continued use and possession
of the property, and may even bring into question whether the
buyer owns the property. In the case of a lender, title defects
can put at risk the lender's ability to sell the property in the
event a foreclosure.
Title insurance
policies insure title to real estate for owners and mortgage lenders
by:
- paying for
losses that arise from errors in title examination or recording,
or which result from hidden defects;
- paying of
legal expenses for clearing title defects; and
- assuring
that the marketability of the property remains unimpaired from
title defects.
Title policies
are based on a search and review of the public land records and
other relevant documents. A thorough examination is necessary
to determine title ownership and any other matters affecting the
title and use of the property.
Title policy
coverage is long-term. The owner of real estate is insured for
as long as he or she owns the property or is liable under the
warranties included in his or her deed to convey the property.
The mortgage lender continues to be protected upon foreclosure
of the insured mortgage.
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