What’s in The Title?
What’s in the title? Title insurance that is. For most buyers, not a clue. Schedule A? Schedule B? Perhaps Schedule C? Schedule D? Any mention of these likely draws blank stares. And yet, a borrower risks losing the house and potentially a lot of money by not knowing what’s in the title.
Title insurance plays a different role than casualty insurance and has many limitations. Title insurance may or may not cover items and a survey fills an important role in identifying many of those limitations. Anyone purchasing a home should at least be familiar with the main details of title insurance and a title policy. Unusual items in a title policy may require an attorney. Winning Mortgage, Winning Home provides insight to the schedules and provides discussion of the knowledge a buyer should have. It’s not a legal guide as no one can provide legal advice unless it is specific for a particular situation and holds a license to practice law.
Borrower Risks and Title Insurance Companies
Can a borrower lose a home entirely? Yes. Does the borrower get made whole monetarily on such a loss? Likely not unless one has taken the correct steps. Upgrades put in? Gone. However, there are ways to protect oneself from monetary loss. Its important to remember that a title insurance company, like any insurance company, doesn’t have a vested stake in a borrower staying in a home or achieving the specific result a borrower may want. Insurance companies have a monetary obligation. Once complete, whether a borrower remains in the home is irrelevant.
Does the lender care if the borrower remains in the home? Like insurance companies, lenders only have a monetary interest. Lenders want to recover all the money lent plus interest while keeping a security interest in the property as an incentive and recourse for repayment. Once paid off, lenders don’t care if a borrower remains in a home.
As noted, answers depend on specific circumstances. However, a guide and basic knowledge put you ahead of probably 90% of borrowers. Title insurance is important to your lender and to you. What do you know about title insurance?