All posts tagged: Title Insurance

IS ANYBODY THERE? THE PROBLEMS WITH NATIONAL TITLE COMPANIES

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National title companies are easy to find online…unless you have a problem.  If you need help to defend your ownership rights of your property, then it’s up to you to navigate a website, or you’re at the mercy of a telephone tree.

It could be a lesser claim, like your neighbor says that your well is three feet on her property, or it might be something bigger, like a survey error puts a highway smack-dab through the middle of your living room.  Either way, legal fees are expensive.

The claim may be crazy, but it’s your responsibility to defend your ownership rights.  Title Insurance goes a long way to help you.  Title Insurance not only pays for your legal defense, your policy also provides the attorney.  That’s great…so long as your title company answers your call.

A local title company has more accountability to you.  If there’s a challenge to your real estate title, a local company will take your call, or you can walk in the door and speak to someone face-to-face for help.  People who work at a local title company are going to see you at church or school functions, shopping at Wal-Mart, or enjoying downtown.  When they review your closing documents with you, they’re going to make sure you understand them.  A local title company is not going to close the deal over the Internet and never see you.  They’re there to make sure your ownership goes smoothly, and to defend your rights if it doesn’t.

Furthermore, a local title company normally costs less than a national title company.  A national title company may tag on a fee for one region which does not apply for your location.  A local company will only apply fees specific to the area—you won’t have superfluous expenses.  National companies also may add fees for working long distance, fees that would not be charged when using a local title company.

The personal touch of a local title company gives you superior service in cost and accountability for your most valuable investment, your home.

Land Title of AmericaIS ANYBODY THERE? THE PROBLEMS WITH NATIONAL TITLE COMPANIES
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WHAT’S CHEAPER, A SURVEY OR A JACKHAMMER?

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Jackhammers are not as easy as they look. (And if you thought it looks easy, you scare me a little bit.) SO why in the heck is a Land Title Blog talking about jackhammers? Why not? Aren’t you tired of hearing about title stuff? So I figure I’ll spend this paragraph and talk about jackhammers and the importance they have in everyone’s life. Nah, you’re not that lucky!

If you’re one of those highly intelligent souls who thinks they can just take a visual of their property lines and that’s good enough to save the cost of a survey, you might need a jackhammer. As comedian Bill Engvall says, “Here’s your sign!”

Jackhammers cost around $3,000 and a land survey is a fraction of that expense.

Don’t try this at home! Leave property disputes to the professionals. Use a Survey instead of a Jackhammer to settle property line disputes.

Land Title of AmericaWHAT’S CHEAPER, A SURVEY OR A JACKHAMMER?
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SOUTH FLORIDA CONDO NIGHTMARE: PAST DUES!

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In a Florida home foreclosure, when the bank repossess the home, the lender is not liable for more than one year of back home owners’ association fees when it’s a subdivision, and six months when it’s a condo.* Often that’s not nearly what is owed, but it gives the association some recovery from the loss of income. That’s what’s supposed to happen, but one South Florida condo association—which shall remain nameless here—sees it differently.

The condominium owner went into foreclosure on his unit. He didn’t make his mortgage payments and he also couldn’t afford the condo association dues. Financial hardship led to foreclosure and months of unpaid association fees. Finally the condo unit went to auction on the courthouse steps, and the lender ended up with the property.

Then a buyer came along. He bought the foreclosure condo from the lender and got title insurance. As part of the closing process, the title company obtained an estoppel letter from the condo association that provided a certain amount to catch up all the back association fees.

Everything was great. The new buyer became the owner of their dream condominium. They got done, closed, everybody thought everything was wonderful. Now if that were really the case would I be writing this blog? In a typical situation, everything that transacted here here would be considered normal and customary—everybody crossed their proverbial t’s and dotted their proverbial i’s—why would the buyer waste money on title insurance?

Let’s list all that has transpired: There was a proper foreclosure and sale at the courthouse steps. When a new buyer was found, a new title search was done and everything came back spotless, no issues. In preparation for closing, the title company acquired all proper estoppel letters and all monies due including taxes. And the closing was conducted properly—what could go wrong?

I’ll tell you what could go wrong: the association came back and demanded all unpaid association fees prior to the buyer purchasing the condo.

“But we have an estoppel letter that says all association fees are current,” said the buyer.

The association said, “Show us the original letter.”

The buyer says, “ The lender only has a faxed copy.”

The association says, “That’s not good enough. Pay up, because if you don’t we’re going to foreclose… and by the way, thank you for the new cabinets and flooring and the updated toilet seats, they’re nice.”

How could this happen? Everything was done right. The answer: crap happens, and it’s expensive when it does.

There is a happy ending to this story even though this story has not ended: the buyer has title insurance, and the title insurance company is paying to defend the buyer’s ownership.

In a case like this, it doesn’t matter if the lawsuit is right, it doesn’t matter if it’s legal, it doesn’t matter if it’s covered in spaghetti and meatballs—the New Owner has to defend his interest in the property in a court of law… and that costs money. Without Title Insurance, the full force of the legal expense lands on the New Owner’s wallet.

The legal expense—hiring an attorney and court costs—versus the balance of the condo association. Which is more? Doesn’t matter if you have Title Insurance. Your Title Insurance Policy will either settle the claim or provide and pay for the legal defense of your ownership interest (and pay out the policy amount if that defense fails).

You buy Title Insurance for peace of mind—not because you know you are going to use it. Title Insurance is a one-time fee you pay at ground level in case a high rise of legal expense happens related to your property ownership.

No matter where you live, the view is better if you’ve got clear title, and beyond that, you’ll rest well if you’ve got financial protection through Title Insurance.

*This limitation on what’s owed on back association fees is only applicable if the foreclosing lender is the highest bidder at the courthouse steps. If a private party is the highest bidder, that person is responsible to pay all back association fees no matter how high the fees are or how far back the fees go.

Reason #328 to get Title Insurance.

Land Title of AmericaSOUTH FLORIDA CONDO NIGHTMARE: PAST DUES!
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GOOD TITLE IS GOOD BUSINESS

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Title insurance covers more than ever in the telecommuting trend.  If you work from home, your real estate title insurance is pulling double duty to protect your personal and professional life, because it’s insuring the place where you live as well as where you work.  Therefore, good title is good business.

Telecommuting is the big trend in work style. While working at home was once the exclusive purview of housewives and homemade entrepreneurs, the 2010 U.S. Census Bureau reports a 67% increase in home-based work for employees of private companies over the past decade.

By combining your primary residence with your primary source of income—your job—you tie workplace security to your home ownership rights.  Any question or claim to your real estate title could put your jobsite at jeopardy.  That makes title insurance more valuable than ever.

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.

Title insurance costs a low, one-time fee, typically purchased at your real estate closing.  However, if you have inherited your home or your home was given to you by a family member, it is never too late to insure your real estate.  Title insurance provides and pays for the legal defense of your real estate ownership should somebody challenge your rights to the property.

If you are uncertain of your title insurance coverage, you can call Land Title of America, Inc. at (904) 797-9600 for a free status check.

By C. J. Godwin

Land Title of AmericaGOOD TITLE IS GOOD BUSINESS
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WHY DO YOU NEED A TITLE COMPANY?

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At Land Title of America, Inc., we’re not just an air-conditioned office full of friendly faces.  We’re here to help—in the immediate sense when you have a real estate closing, AND if there’s a problem.  If someone questions the real estate title to your home, you can walk in our front door and receive assistance in defense of your ownership rights.  Our services breakdown into three parts:

  1. Real Estate Closings – Yes, one function of a title company is to conduct real estate transactions. It’s a process, and it starts with a title search. We examine public records to make sure the chain of ownership is strong.  If we find a weakness, then we assist the seller in addressing that weakness.  We’re also watching the clock and the punch list to make sure surveys are done, inspections are made, and the money is in place.  We make sure funds are distributed correctly and documents are recorded into public record.  We want all parties involved to walk away from the closing table satisfied that their deal has been done as specified in the real estate contract.
  2. Title Insurance – Title companies sell title insurance. Though title insurance is not required by law, it’s normally a contractual obligation, and a real good idea.  Furthermore it’s a real good deal at a low cost that gives you a lot of financial protection on your real estate investment.  While title companies research every detail to minimize risk to the new owner, they also offer (at a one-time, low cost fee) an insurance policy that financially protects that owner from claims against his or her ownership.  The title search is an analysis of the situation, but it’s no guarantee; title insurance is the financial protection in case the title search doesn’t catch something.  Title insurance provides and pays for the legal defense of your real estate ownership should somebody challenge your rights to the property.
  3. If There’s A Problem With Your Real Estate Title – If someone questions your ownership to your home, you’re going to want a title company that can help you stand up for your rights by providing legal representation and paying for it.

It’s a bad day when a customer walks through our door because someone has filed a lawsuit against them, claiming ownership to their home.  But it’s good when we can be a big part of the resolution by putting that title insurance policy to work.  That’s what a title company like Land Title of America, Inc. is there to do.

Land Title of AmericaWHY DO YOU NEED A TITLE COMPANY?
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Logical Conclusion: Owner’s Title Insurance

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This statement is untrue:  the title to your house is clean.

Now, if your home title is clean, then the statement is false, which means your home title has an issue.

…On the other hand, if your home title has an issue, then the statement is true (as being untrue), which means you do not have a title issue.

You could sit there and try to work that out…or you could just get Owner’s Title Insurance.

Owner’s Title Insurance offers financial protection to homeowners in any scenario.

Even if you get a title search, you cannot say conclusively that your property title is clean.  A title search can only see what’s in public records.  It doesn’t account for an old deed in somebody’s sock drawer, or a clerical error, or a previously unknown heir (they happen!!).

While a title search is a necessary precaution to deal with any known problems, Owner’s Title Insurance covers the hidden risk of possible title challenges.

Furthermore, title insurance is low cost, and it’s a premium you pay only once, which covers you for as long as you own the property…and forever after you convey it, covering your financial liability for your link in that chain of title.

Logical Conclusion:  Owner’s Title Insurance is the most cost effective way to financially protect yourself from title issues on your property from now through forever. 

 

Stephen CollinsLogical Conclusion: Owner’s Title Insurance
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Attorneys Who Write Title…The Conversation Continues

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We appreciate people reading our blog, and we’re glad to have received a comment on our recent post about attorneys who write title insurance in the same transaction (“Attorney Mistake in Writing Title” http://staugustine.com/interact/blog-post/stephen-collins/2015-05-20/attorney-mistake-writing-title#.VcNx4flViko ).   The reader brings up some interesting points, which we’d like to address.  Please see the reader’s comments and our responses below.

 

  1. Reader Comment: “…there is absolutely nothing wrong with an attorney representing a client in a real estate transaction in which they also write the title insurance policy.”
  1. Land Title Response: If you understand the role of the title insurance company, how can that not be a conflict?

 

  1. Reader Comment: “There is nothing in your example that has anything to do with the fact that the closing agent was an attorney.”
  1. Land Title Response: I agree to a point, we take no issue with an attorney title company; we take issue with an attorney as a title company and representing the client in the same transaction.

Had there been a separate attorney in the example, one attorney would help the other to complete the fiduciary responsibilities for the buyer.  Even good people in desperate times do desperate things.  An attorney representing the title underwriter and a separate attorney representing the buyer is the best way to represent the buyer’s interest.

 

  1. Reader Comment: “I could give many more examples of incompetent title companies that have created title defects because of their mistakes…”
  1. Land Title Response: Title insurance companies make mistakes, you are exactly correct. Incompetent title insurance companies and incompetent attorneys are the woe of property owners.  What better way to prevent that, than to have a separate attorney, one who represents only the buyer/seller’s interest?

 

  1. Reader Comment: [Continuation of previous comment:] “I could give many more examples of incompetent title companies…drafting documents outside of what is allowed by the Florida Supreme Court or by advising buyers or sellers about the closing documents.”
  1. Land Title Response: I agree that this is a problem; however, as I stated earlier, the best way to handle a real estate transaction is to have an attorney title company or a title insurance company writing the title insurance policy and a separate attorney represent the buyer.

Please note though, under issuance of the title insurance commitment, title insurance companies are allowed to issue legal documents to facilitate the transaction.

 

  1. Reader Comment: “…an attorney can legally explain the closing documents to their client, point out any problems with the survey, and also explain the impact of the title exceptions…”
  1. Land Title Response: You are correct; an attorney can explain all those things. An attorney who doesn’t write the title insurance for that particular transaction is the best person to do so because he can truly represent his client without conflict with his contractual obligation to his title underwriter.  How do you eliminate risk for the title insurance underwriter with whom you have a contractual obligation without increasing risk for your buyer?  On the other hand, how do you eliminate risk for your buyer without increasing risk for your title insurance underwriter?  To think that their interests are aligned is correct…unless there’s a title claim, and then their interests are at great odds.  Which side of the fence are you going to be on as the attorney who wrote the title insurance and issued the title policy for the same transaction?  When your buyer comes to you and says, “I need you to sue the title company?”  Will you be able to?  Will you be able to represent your buyer?  Or will you be able to tell them?  How much better would it be if your buyer came to you and asked you to represent them in a title insurance case in which you did not also write the title insurance?

 

  1. Reader Comment: “What you described as happening with that attorney in Pennsylvania has nothing to do with the fact that they were an attorney.”
  1. Land Title Response: I agree with you 100 percent.

 

  1. Reader Comment: “…how would closing with a non-attorney title company be any better since they would not represent the buyer’s or seller’s interest either?
  1. Land Title Response: It wouldn’t. We have no issue with an attorney title insurance company.  In some cases, if an attorney title insurance company specializes in real estate, they can be a great choice.  The only issue is when that attorney writing title insurance feels they can represent the buyer and the title insurance underwriter at the same time.  Conflict.  Conflict.  Conflict.  Anyone who does that is looking at the sun and denying it’s there.

 

To see the original post, “Attorney Mistake in Writing Title” along with the original reader comment, go to http://staugustine.com/interact/blog-post/stephen-collins/2015-05-20/attorney-mistake-writing-title#.VcNx4flViko .  Again, thank you to all our readers.  We appreciate your sincere consideration of these important aspects of property ownership, and encourage your dialogue in this ongoing conversation.

To speak with us directly, you may contact us during business hours (EST) by calling our office at (904) 797-9600 or Live Chat with us here on our website.

Stephen CollinsAttorneys Who Write Title…The Conversation Continues
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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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