How Lenders Benefit From Title Insurance
Despite the best intentions and due diligence of the buyer or seller (or both) of a property, the unexpected can and does happen when it comes time to sell a property. Unforeseen hiccups such as unpaid taxes, liens that may have been filed against the property by a third party, title claims that the seller may be unaware of, errors in filing documents, or even title forgeries – the list goes on and on as to the possibilities that can sometimes happen.
In any of these scenarios, title insurance can offer protection – not to mention much needed peace of mind. As part of issuing title insurance, the title company conducts a check of public records to verify that the title is free of any issues, sometimes referred to as a “clean title.” If any concerns or claims are uncovered, even after the purchase is complete, title insurance is there to protect from potential loss or litigation.
What Is Title Insurance?
Title insurance is essentially an insurance policy that protects buyers, sellers or their lenders from issues that may arise on the property’s title. This type of policy helps reduce the risk involved when buying and selling a property.
Designed to provide protection and minimize risks, title insurance covers the costs of resolving any issues that may arise with the title, such as if the issue goes to court or claims must be paid as a result.
Even though it may sound stressful, issues with property titles can occur fairly often and sometimes it’s as simple as a title mistakenly getting lost or misfiled records. Usually, these matters can be resolved in quick and reasonable fashion, but having title insurance on your side (or the lender’s) helps ensure that is indeed the case.
How Do Lenders Benefit From Title Insurance?
Like all parties involved in financial transactions (especially those of substantial amounts), it’s understandable to want assurances that your investment is protected. When it comes to the home buying process, the same is true for lenders.
From the perspective of the lender or financial institution, title insurance is critical to making sure that their investment is protected. It’s a big risk to put forth often hundreds of thousands of dollars, so should any issues arise related to the property’s title, incorporating title insurance as part of the closing requirements ensures that the lender will be able to recoup the loan amount.
Title insurance can also provide coverage for legal expenses in the event any disputes occur regarding the property’s title.
Title Insurance Lends Benefits To All
When property changes hands, it can be a lengthy and complex transaction with lots of “moving parts,” as the saying goes. Many parties are also often involved in the process from start to finish, so the chance for things to go sideways does exist. Though lenders can experience great benefits from title insurance, having this type of coverage in place can provide protection for all.
Backed by a team of industry experts, Express Title & Closing offers services including title insurance, title searches and reports. Their “anytime-anywhere” closing policy commitment to customers helps bring peace of mind throughout the closing process.
