subject: Title Insurance: Protecting Your Investment [print this page] Title Insurance: Protecting Your Investment
Owning your own home gives a feeling of accomplishment. It marks the efforts of the homeowner to save and purchase property through their hard work. Early in the history of the United States, it was viewed as an honor to own land and being a landowner afforded you a number of privileges. Today the views of owning a home are not as grandiose, but it does not detract from the personal accomplishment. Some families put their life savings toward a house that they want to purchase. With so much invested in the property, it seems only right to protect your investment.
Definition And History Of Title Insurance
The very first title insurance company was established in 1853 to protect home buyers and lenders from unexpected circumstances with the location purchased. While the coverage varies depending on the type of policy and the endorsements added to the policy, in general it specifically protects the buyer or lender from defects, liens, taxed owed and other situations that may affect the ownership. It largely exists only within the United States with a small percentage of overseas policies in existence.
The reason for it is due to possible discrepancies of governmental recordings based upon the document recording system in place. The process of getting insurance takes some time and effort on the agent's part. For example, a home that is located in Fort Myers, FL is being purchased. The buyer opts to cover the purchase with a policy from a Fort Myers agent. That agent then goes to the governmental office in charge of retaining the records of property ownership in Fort Myers. Those records are reviewed to determine whether there are any liens, defects or other issues with the title. If no discrepancies are found, a policy can be issued immediately upon closing.
What Is Covered
There are two types of title insurance policies that exist. The first is the owner's policy. This protects the new owner of the policy against all defects, encumbrances or liens that existed prior to the date it was issued unless they are specifically excluded within the policy. The new owner may obtain additional coverage on the property by purchasing endorsements. The lender's policy, the second type, insures that the lender has a valid, enforceable lien on the property. It is solely for the lender
Rules Are Rules
The Real Estate Settlement Procedures Act (RESPA) was enacted in 1974. It is about settlement procedures and closing costs. RESPA is a consumer protection statute designed to help homebuyers be better shoppers in the home buying process, and is enforced by HUD. Take the time research the best title insurance company available.
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