All posts tagged: title insurance policy

Attorney Mistake in Writing Title

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Attention Attorneys who represent their clients in a real estate transaction AND write title insurance for them in the same transaction:  I want to talk about CONFLICT OF INTEREST.

How can an attorney objectively write a Title Insurance Policy and represent a client in a real estate closing?  Who does the attorney really represent?  Answer:  The Title Underwriter.*  That attorney has a contractual agreement to represent the title insurance company first—the homeowner’s interest is subordinate.  How is that for proper legal representation of the homeowner?

An attorney who writes title insurance AND represents a client IN THE SAME CLOSING doesn’t really care about the client, and violates the mutual trust of an attorney-client relationship.  

An attorney who writes title insurance and practices law is fine, as long as that person doesn’t represent a client in the same transaction.  A title insurance company owned and operated by an attorney?  No problem—I’ll compete with you all day long.  But if you try to represent a client in the same transaction in which you write the title insurance policy, then I take issue with you—CEASE AND DESIST IMMEDIATELY for the sake of your customers!

Let me tell you a little story about a lady named Sheila.  Her attorney/closing agent never recorded the deed and mortgage.  After paying nearly $70,000 into the loan, Sheila goes to refinance only to find out she doesn’t actually own the house she’s been living in for almost four years.

Problem 1:  The attorney who supposedly represented Shelia has a contractual relationship with the title company who now has a title problem.

Problem 2:  That attorney was suspended for three years.

Problem 3:  The title policy was never issued.

Problem 4: The title company where the attorney/closing agent worked refused to pay for the title error.

Problem 5:  Sheila’s going to have to pay new closing costs to have her deed filed.

How could this have worked differently?  

Sheila could have hired an attorney whose interests were only aligned with hers.  Her attorney could have made sure all documents were properly recorded and a valid title policy issued, insuring her against any title questions.  (But instead Sheila had a selfish attorney who tried to represent her and the underwriter, and when the doggie doo-doo hit the fan, Sheila was left without representation and without insurance.)

Any questions?

This is a true story that happened in Pennsylvania—how many stories don’t we hear about?  In how many cases is the result of dual representation so devastating the homeowner victim can no more afford to fight than they can afford to live in the house they thought they owned?

“This case is a perfect example of why people have to hire their own attorney when dealing with this much money,” said Pennsylvania real estate lawyer, William Mackrides, about Sheila’s situation.

There’s no way this woman’s problem would have gotten this far if her attorney hadn’t also been her title agent.  Sheila’s story shows why you cannot just rely on the attorney who writes your title insurance to also represent you.

Everybody’s human.  Everybody makes mistakes.  The separation of representation—the homebuyer’s attorney and the title company—adds an objective checkpoint so that each party’s interest is fully represented without bias.  

There are a lot of fine attorney/title agents out there, and when they play title agent only, that’s great.  But if you think your attorney/title agent has your best interest in mind first, then you could be $70,000 wrong.

 

* If financing is involved, then the attorney has a contractual obligation to represent the title underwriter first, then the lender, and finally the homeowner.  Thus the homeowner would be third in line for legal representation.

 

Stephen CollinsAttorney Mistake in Writing Title
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Title Insurance is Champion of Ownership Rights!!

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In the never-ending battle for truth, justice, and clean title to real estate, Title Insurance is the champion of your ownership rights!  From easements to inheritance, no claim is too small or too large for an Owner’s Title Insurance Policy—your Title Insurance company is there to fight for you!!

Superhero1

Keepin’ It Real

Title Insurance puts the real in real estate.  Should you have a claim against your deed, Title Insurance will meet the challenge to your ownership, providing the legal fees and the attorney to do battle in court if necessary.  (Even if your court battle loses, you still get the policy amount.)

When you obtain property, don’t walk—fly to make sure you have the proper coverage to fully insure your real estate title!!  It’s a one-time fee, normally paid at closing (but can be acquired at any time), and costs a lot less than hiring an attorney on your own.

Furthermore, Title Insurance is also a proactive measure as well as a defensive strategy.  The cost includes a title search to address any questions in the chain of title that appear in public records.  Once that’s done and any issues dealt with, then the policy insures against any questions that may arise in the future, but aren’t necessarily revealed in public records.

One good deed deserves another!

And later when you convey your property to a new owner, your Title Insurance policy continues to protect you from possible challenges for which a new owner could hold you liable.

Title Insurance – It’s good for now, it’s good for later, it’s good for what happened in the past, and it’s good for you!!

Stephen CollinsTitle Insurance is Champion of Ownership Rights!!
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Claims Versus Reality in Title Insurance

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The perception of Title Insurance is that for every $100 that gets paid into the pot, only $6 of that gets paid out.  The reality is that for every $100 paid in, $94 goes into making sure no more than $6 will have to go towards a title claim.

While Title Insurance takes on the financial responsibility for title-related issues, that financial responsibility is limited to the policy amount—the cost is much greater than what’s covered.  The power of Title Insurance is the preventative work that goes into it.

Title Insurance is NOT casualty insurance—Title Insurance is PREVENTATIVE insurance.

Coverage:

Title Insurance coverage is unique because it reaches both forwards and backwards at the same time to protect the homeowner.

Title Insurance is good from the beginning day of the policy backwards.  It covers everything that happened before the real estate acquisition, including all unforeseen title flaws, and the policy pays for litigation should someone challenge the ownership through a lien, claim, or taxes.*  Thus the coverage protects the homeowner during their ownership of the property and for everything that happened before they took title.

Title Insurance insures the homeowner’s financial interest forwards into the future, even protecting them after they sell that property.  Because the Contract for Purchase and Sale typically requires the Seller to convey ownership with warranties, the Seller becomes responsible for anything that has ever transacted on the property. Thus the homeowner retains liability for their link in the Chain of Title even after they sell.  A Title Insurance Policy protects the homeowner for as long as that person has a financial liability to the property…which is until death.

Service:

The Title Insurance company’s objective is in lockstep with the consumer’s best interest:  to avoid questions or challenges of the homeowner’s title.  Owner’s Title Insurance is primarily for prevention of claims against home ownership, and a title search is part of the risk assessment.  Thus in the examination of public records, the title company has a vested concern to find any and all complications to the ownership title, in fact to kick the proverbial sleeping dog…on purpose.  We’d rather find out now (rather than after the fact) whether or not that dog has teeth and a temperament for biting.

Though Title Insurance works mostly through prevention, it offers security via financial protection from the massive costs of litigation and other legal expenses should a problem, challenge, or complication to a Florida homeowner’s title arise.  No matter how much effort is put into this prevention, bad things still happen.  It’s expensive to be right when someone thinks you’re wrong.  (Just remember, another person’s perception is reality.)  Owner’s Title Insurance provides and pays for all costs associated with a title claim (whether through settlement, legal defense, and / or reimbursement of the policy amount to the homeowner if that defense does not prevail).

Cost:

The cost of Owner’s Title Insurance is promulgated by the State of Florida, and the current rate has been the same for over 20 years.  It is a nominal fee compared to litigation costs.  Furthermore, Owner’s Title insurance is a one-time fee, typically paid at the closing of a real estate transaction.  Once it’s paid, it’s paid—no monthly premiums, no annual fees—no additional charge to the consumer, the homeowner.

With Owner’s Title Insurance, consumers pay a set amount for financial protection against the unknown cost of hidden risk to home ownership. 

The Big Picture:

Title Insurance plays a vital role in Florida’s recovering housing market.  As a source of financial protection, Owner’s Title Insurance assures potential Florida buyers they can invest in real estate with stable value backing that investment.

Owner’s Title Insurance adds real value to real estate rights, thus it benefits every Florida citizen.

Any further questions, tune into “Land Title Talk,” on the First and Third Thursday of each month from 8:00 to 9:00 a.m. on 102.1 FM WFOY (http://www.1021news.com).  Please call or text during the show to comment or ask about real estate-related issues.

*Please note Title Insurance does have exceptions.

 

Stephen CollinsClaims Versus Reality in Title Insurance
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How Do You Know If Your House Is Possessed?

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Welcome to Poltergeist Heights!  An Owner’s Title Insurance Policy not only says, “This house it clean!” it insures it.

Welcome to Poltergeist Heights! An Owner’s Title Insurance Policy not only says, “This house it clean!” it insures it.

The easy answer is to get a Title Search.  The best answer is to get Title Insurance.

Possession is a huge deal in real estate.  The big problem is that past owners can come back to haunt your property.  A Title Search is good, but it only sees what’s in the public records.  (A Title Search cannot see the deed filed in Uncle Bob’s sock drawer that gives ownership of your house to Cousin Delilah.)  Whereas an Owner’s Title Insurance Policy not only says “This house it clean!” it insures it.

Title Insurance is a policy that protects the real estate owner from financial loss due to a challenge against his or her real estate ownership. 

The cost to defend yourself against a title claim is a grave matter—don’t do it on your own!!  A Title Insurance Policy is a minimal expense compared to the cost of defending your ownership rights in a court of law.

Stephen CollinsHow Do You Know If Your House Is Possessed?
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Title Challenges in Family Transactions

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Most property title challenges come from two situations.  Right now in the current economic climate, we get a lot of title claims in foreclosure properties.  The second major source of title challenges is from family transactions in real estate, and this type of title claim is around in all economic environments.

Whenever you interact with family, you take shortcuts because, hey, it’s family.  Maybe dad told you to do it, but then as soon as the head-of-household is gone, other family members may see things differently.  For instance, the woman accused of coercing her father into signing the deed over to her.  She took care of him, but now all the family is suspicious of her.  These things only surface when dad passes on.

Title Insurance cannot prevent the risk of all title claims; however, an Owner’s Title Insurance Policy does pay to fight or settle such claims.  Even if you are inheriting property that’s been in the family 50 years, always get a title policy on the property.

 

Stephen CollinsTitle Challenges in Family Transactions
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The Cash Condo in Miami

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A husband and wife paid cash for a condo in Miami.  They used an attorney to prepare the closing documents and closed on the property.  Thirty days later the Seller’s agent notified them that their check bounced.  What?  But it was a wire transfer?  The attorney’s check had bounced.  Fortunately Title Insurance came into play.

Title Insurances doesn’t just protect the Buyer.  In some cases, Title Insurance protects the Seller.  

Does the Buyer really own the property if the Seller never received the money?  When does title pass?  These become silly questions with Title Insurance.

Title Insurance didn’t have an obligation to the Sellers, but it made sure the Sellers got their money.  Thus there was an indirect benefit to the Seller for having Title Insurance involved.

…These aren’t all sad stories, but they are all good reasons to have Title Insurance.  This is reason #389.

 

Stephen CollinsThe Cash Condo in Miami
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Homeowner That I Used To Know

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You can get addicted to a certain kind of sadness

When you don’t have money because you gave it all to an attorney.

You didn’t have to cut yourself off, make out like homeownership never happened.

You could have just gotten title insurance with proper endorsements.

You didn’t have to stoop so low

Because you’d have money to move to a new place if you don’t prevail in court.

You don’t want to live that way, reading into every word public records say—get title insurance with proper endorsements for financial protection against what’s unseen between the lines in courthouse documents.

Refrain!

A challenge to your home ownership can be financially catastrophic.

Don’t be a homeowner that I used to know—insure your title to your property for financial protection if somebody tells you to Walk Off The Earth.

 

Hey, if you’re not yet one of the viral viewers of “Somebody That I Used To Know” performed by Walk Off The Earth, check out this link:  http://www.youtube.com/watch?v=d9NF2edxy-M

It’s a five member band reduced to one guitar—they should have had a Title Policy so they didn’t have to sell their band equipment!

 

Stephen CollinsHomeowner That I Used To Know
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