FAQNovember 26, 2019 2021-04-14 17:22
Popular Questions About Title Insurance
Below are the most frequently asked questions about the title insurance process. If you don't see the answer to your question below, you are more than welcome to contact our office for additional assistance.
What does owner's title insurance cover?
Sometimes undiscoverable defects can come up after the title search. Under an owner’s title insurance policy, you are protected against certain undiscovered errors in the title.
Title issues include unknown:
- Outstanding mortgages and judgments, or a lien against the property because the seller has not paid his taxes
- Pending legal action against the property that could affect you
- Unknown heir of a previous owner who is claiming ownership of the property
Unforeseeable title claims include:
- Forgery: making a false document
– For example, the seller misrepresents the identity of the person who sold the property.
- Fraud: deception to achieve unfair gain
– For example, someone steals your identity and either sells your house without your knowledge or consent, or takes out a second mortgage on the property and walks away with the money.
- Clerical error: inconsistent paperwork and historical records
– For example, an unforeseeable discrepancy in the property or fence line can cause confusion in ownership rights.
If my lender gets title insurance for its mortgage, why do I need a separate policy for myself?
The lender’s policy covers only the amount of its loan, which is usually not the full property value. In the event of an adverse claim, the lender would ordinarily not be concerned unless its loan became non-performing and the claim threatened the lender’s ability to foreclose and recover its principal and interest. And, in the event of a claim there is no provision for payment of legal expenses for an uninsured party. When a loan policy is being issued, the small additional expense of an owner’s policy is a bargain.
Do you have to renew your policy?
You pay for title insurance only once, when you buy the policy, unless you decide later to add more coverage. Keep your policy, even if you transfer your title or sell the property. Coverage lasts as long as you or your heirs own the land, and may last forever for any title warranties made when you sell the property.
What is the difference between the Standard Title Insurance Owner’s Policy vs the Enhanced Owner’s Policy?
Standard policy covers certain risks which occurred prior to the date of your new owner’s policy such as mortgages or judgements that have gone unpaid by previous owners of your property. For an additional 10% of the standard premium paid one time only, the Enhanced Policy covers the same risks as the Standard policy but also covers certain risks that may occur after the date of your owner’s policy such as someone forging a deed attempting to steal your ownership or if your neighbors build their shed over your property line. Here is a short video that tells you more.
Do title companies charge the same premiums?
In Pennsylvania and New Jersey our underwriters are members of Rating Bureaus and therefore file rates jointly which are then approved by both state Departments of Insurance. All member underwriters charge exactly the same premium rates which are based on your sale price and/or your loan amount. However our great service sets us apart from our competitors.
Why does my lender require title insurance again when I refinance?
When you refinance you are paying off your existing mortgage and taking out a brand new mortgage. You may be changing lenders but even if you are refinancing with the same lender, the policy issued to the lender for the mortgage you are paying off was specific to the original mortgage, for the original amount, on the original date. The new loan now needs to be insured and in order to do that we must research the county records from the time of your original mortgage to the current date and clear claims made against you, pay off debts you have incurred and determine if all municipal charges are current. Only after these steps are taken are we able to insure the new lender that the new loan is in a their required priority position against your property.
May I bring cash to settlement?
No, we cannot accept cash or personal checks however we will accept various forms of funds including wire transfers (please see the video regarding protecting you wired funds at https://www.youtube.com/watch?v=p7gMgwJBBOU ), bank checks or certified funds under certain conditions.
How does a criminal infiltrate a transaction and steal money through wire fraud?
Unfortunately, it is easy for a criminal to steal your money. They follow emails between real estate agents and the buyers and sellers for months until they find out exactly when the closing will occur. They intercept non-encrypted emails to the buyers that include the dollar amount necessary to complete closing. They intercept non-encrypted emails to sellers that include the exact dollar amount the seller will receive after closing and then they strike. A few days before closing the unsuspecting buyer receives an email that looks exactly like the other emails from their real estate agent or title agency with wiring instructions to send their funds to a certain bank account, which of course is the fraudster’s account. As soon as the funds hit the fraudster’s bank account, the funds are swept and the account is closed. The fraudster will contact an unsuspecting seller asking the seller for wiring instructions so that the proceeds can be wired to the seller and then they alter the bank account information so that the funds are sent to the fraudster’s account which is immediately swept. It is virtually impossible to get the funds back once they are swept from the fraudster’s account.
Genesis Abstract will never contact you regarding the wiring of funds via an email. If you receive an email request or email instructions regarding your funds, please pick up the phone and call us at 215-441-5500. NEVER call the phone number on an email you receive regarding the wiring of funds…NEVER.