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Title Insurance

What is title Insurance:

Title insurance is a form of indemnity insurance which insures against financial loss from defects in title to real property and from the invalidity or unenforceability of mortgage loans.

 

Why does title insurance exist:

When you purchase property or place a loan on your property, a title company must search the chain of title on you property. Your lender typically will not loan you any money unless you purchase a lender’s title insurance policy on their behalf. When searching the title at the public land records, the title searcher will discover all matters of title that affect your property. The title search can disclose defects in the title and these defects must be cleared up before the title company can determine that the property is insurable.

Despite the thoroughness of the title examination there are certain matters that may be hidden or undiscoverable during the title search that will have a direct effect on the lender’s loan and your ownership of the property. Some of the examples of these hidden defects include the following; a forged signature on a deed or on a prior deed, an unknown heir of a previous owner who has a legal right to the property, documents executed using an invalid power of attorney or just simply mistakes made by the public records wherein they did not properly index or record a document. It is for these reasons that title insurance exists since title insurance offers financial protection against these and other covered hazards.

 

Types of Title Insurance:

Lender’s policy:   The loan or lender’s policy is issued only to the mortgage lender. Most lenders require the borrower to pay for this policy so that the lender has insurance that the loan they make to you is valid. Lender’s insurance only protects the lender. It does not protect you, the owner. The lender’s policy does not protect the owner’s equity in the property and will not pay the owner’s legal expenses if there is a title problem. Only an owner’s title insurance policy will protect the homeowner. The lender’s insurance policy lasts as long as you have the loan on the property. If you refinance your loan and get a new loan, your new lender will require a new lender’s insurance policy even if you refinance with your same lender.

 

Owner’s Policy: An owner’s title insurance policy is usually purchased at the time you purchase the property. At settlement you will pay a one-time policy premium that will cover you for as long as you own the property. If you refinance, you will not have to pay for a new owner’s policy of insurance because you are not changing the ownership of the property. However, you will have to pay for a new lender’s policy. The good news is that if you refinance and provide your title company with a copy of your owner’s title insurance policy, you will not have to pay the full premium for the new lender’s policy. The premium for the new lender’s policy will be at a reduced or reissue rate. Since your home is likely your largest investment, it is very important that you protect that investment with an owner’s title insurance policy.

           

Title Insurers:

We know how important your property is to you. This is why we use the largest title insurer in the country to insure our buyers and their lenders. We have Agency Agreements with the following title insurance underwriters:

 

commonwealth
Commonwealth Land Title Insurance Company:
Commonwealth is the predecessor to the very first title insurance company. With the recent acquisition by Fidelity National Financial, it is part of the largest title insurance company in the U.S. Commonwealth offers sound underwriting with many resources to help us meet our customers’ needs. Go to cltic.com to learn more about Commonwealth.

 

 

fidelity
Fidelity National Title Insurance Company
: Fidelity is a subsidiary of Fidelity National Financial, a Fortune 500 company. Fidelity is also one of the oldest and most financially sound title insurance companies in the United States. Learn more about Fidelity at fntic.com.

Jeffrey T. Bald, Esq. President
192 Duke of Gloucester St. • Annapolis, MD 21401
(410) 267-9300 • (410) 269-1900 office • (410) 269-6477 fax
contact@atlantictitlecompany.com

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