Understanding Title Insurance

Title to a property is a record detailing the owners of the property and rights associated with the ownership. Title typically shows a progression of ownership from the first owner to the current one. Title is a fairly simple concept, but when it goes wrong it is a nightmare. That is where title insurance comes in.

Title Insurance

Title insurance guarantees that the title on a property is marketable when you purchase the home, condo, land, etc. You should always pay for title insurance. It typically costs a few hundred dollars and will save you a bundle if problems arise.

When you buy title insurance, a title insurance company researches the title for the property. The insurance company will look to see if the title is clear. "Clear" simply means that the seller is truly transferring title to you and no other person can claim ownership. While this sounds fairly simple, rest assured that title problems arise all of the time.

Title Problems

You might be wondering how you could possibly have title problems. Here are a few examples:

1. Divorcing Couples - Divorce is unpleasant and sometime very ugly. In particularly nasty situations, one spouse may attempt to sell a home without telling the other. To gain clear title, you need both spouses to sign off on the sale. If you don't, you are going to become a party of the divorce proceedings. Now, wouldn't that be fun?

2. Estate Sales - If you are purchasing a house as part of an estate sale, there can be real problems. The heirs may not be getting along and in an effort to "get what's mine", may try to sell the residence without including all the heirs in the transaction. If you buy this home, you could end up involved in a lawsuit filed by an heir left out of the transaction.

3. Ingress and Egress Issues - Title to a property can have technical issues related to egress and ingress. Occasionally, one finds title to a property that is so messed up that the owner doesn't have the right to enter or leave the land because to do so would require crossing another person's property. In short, the property is landlocked and something must be worked out with the neighbors. Typically, a solution comes in the form of hard, cold cash?lots of it.

These are just a few issues that can arise with title. With real estate, unique issues can arise all the time.

If you buy title insurance, you don't have to worry about problems with title. If a problem arises, you calmly pick up the phone and call the title insurance company. The insurance company will come up with a solution, even if it means paying you for bad title.

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More than 40 states signed onto a proposed $25-billion deal with major mortgage servicers over faulty foreclosure practices. New York, Nevada and Delaware joined California in holding out for better terms.

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California has until Monday to share in a multi-state deal with banks to obtain mortgage relief and reforms. Atty. Gen. Kamala Harris, who walked away from talks last year, says the door remains open.

With a Monday deadline at hand, California officials have resumed direct talks with the Obama administration about joining a multibillion-dollar, multi-state mortgage settlement with the nation's largest banks, a source said Sunday.

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They don't believe they can sell their property for what it's worth, so they're spending money on making their homes more comfortable.

Do you fit any of these descriptions?

A biennial research report by the National Assn. of Realtors indicates that a handful of real estate agents and brokers and their clients either don't know the law or don't care to follow it.

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The president aims to help about 3.5 million people with good credit who are unable to refinance at historically low rates because their homes are worth less than their mortgages.

 

The White House hopes to help millions of homeowners lower their monthly mortgage bill with a $5 billion to $10 billion plan to set up a streamlined refinancing program for people who are current on their payments.

The Standard & Poor's/Case-Shiller index of 20 large U.S. cities fell 1.3% in November from October as foreclosures continue to drag down the housing market.

Three straight months of home-price declines in the biggest U.S. cities showed that foreclosures remain a significant drag on a housing market that is entering its fifth year of deterioration.

L.A. Clipper Chris Paul may be quick down the court, but he moves pretty fast when it comes to buying multimillion-dollar real estate too.