*Part I

As recently as this summer, some questioned the use of title insurance, suggesting it was an unnecessary expense when purchasing a home. Yet over the last few months, reports that paperwork in the foreclosure process could be invalid have raised questions about the validity of title to foreclosed properties and sparked fear that homeowners who purchased in good faith could possibly lose their home.

Today more than ever, consumers are reminded that in order to have peace of mind, they should purchase an owner’s title insurance policy whenever they buy a home. This is especially true when buying a property that has been foreclosed. Anyone who purchased an owner’s title insurance policy when they acquired a foreclosed property will be protected if ownership issues arise due to a lender’s foreclosure documentation practices. An owner’s policy provides assurance that your title company will stand behind you if a covered title problem arises after you buy your home. The bottom line is that your title company will be there to pay valid claims and cover the costs of defending an attack on your title. Title insurance compensates and provides legal representation to real estate owners and lenders against any financial loss that might arise because of undiscovered liens, encumbrances or defects in the title to the property.  These defects can result in total losses, where a defective foreclosure or forgery means legal title is not actually conveyed, or they can result in partial losses where a neighbor’s garage or fence encroaches on the insured property.

There are two basic types of title insurance policies. A lender’s policy, usually based on the dollar amount of the loan, protects only the lender’s interests in the property should a problem with the title arise. Similarly, an owner’s policy, usually based on the home’s total purchase price, protects only the homebuyer’s interests in the property should a problem with the title arise. An owner’s policy will provide protection against ownership challenges, errors or omissions in deeds, mistakes in examining records, missed liens, forgery and undisclosed heirs, among other things.

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The American Land Title Association helps educate consumers about title insurance so that they can better understand their choices and make informed decisions. Homebuyers, regulators and legislators are encouraged to check out the website, www.homeclosing101.org, to learn more about title insurance and the closing process.

Title Junction is a full service real estate title company serving the area of Fort Myers, Cape Coral and the entire state of Florida since 2005. The company handles a number of real estate title services for both commercial and residential properties. Employees of Title Junction can also act as a witness in courtesy closings as well as an escrow agent or a notary public. Please contact Title Junction, LLC for further information @ 239-415-6574 or http://www.title-junction.com.