What is Title Insurance?

Title insurance is a contractual obligation that protects against losses that occur when title to a property is not free and clear of defects (e.g. liens, encumbrances and defects that were unknown when the title policy was issued).  The terms of the policy define what risks are covered and what risks are excluded from coverage.  The title insurer will reimburse you for losses that are covered, up to the face amount of the policy, and any related legal expenses.  This protection is effective as of the issue date of the policy and covers defects arising prior to your ownership.  Title companies issue policies on all types of real property.  Two types of title insurance policies for real property are common: a lender’s policy and an owner’s policy.

Who Should Purchase Title Insurance?

Lenders require title insurance as a condition for your loan.  Two types of policies are available:  an owner’s policy and a lender’s policy.  A lender’s policy insures that the lender’s security interest in the property has priority over claims that others may have in your property.  A lender’s policy does not protect you.  Similarly, the prior owner’s policy does not protect you.  If you want to protect yourself from claims by others against your new home, you will need an owner’s policy.  An owner’s policy insures the buyer for as long as he/she owns the property.  This protection is limited to the value of the property.  It is usually less expensive to purchase a lender’s policy and owner’s policy at the same time from the same title insurer.  Contact our quote department for additional information.

How Much Title Insurance Will I Need?

The homebuyer should insure the full purchase price of the property; the lender only requires title insurance to cover the amount of your mortgage loan(s).

What is GAP Coverage and Do You Provide It?

The "gap" is the period of time from the effective date of the most recent title commitment to the date the deed and/or mortgage are recorded at the county.  YES, we do provide gap coverage! This coverage protects against any other liens or encumbrances being attached to the property during this “gap”.  This coverage is automatically provided on every transaction West title closes.

Why is a “Limited Warranty Deed” used for my REO purchase?

A Limited Warranty Deed only warrants title for the time the seller owned the property. As REO sellers acquire property through foreclosure, they are unwilling to warrant title beyond the scope they actually owned the property.

How am I protected from possible title defects before an REO seller acquired the property?

The owner's policy of title insurance assures a purchaser that the title to the property is vested in that purchaser and that it is free from all defects, liens and encumbrances except those listed as exceptions in the policy or are excluded from the scope of the policy's coverage. This is why most REO sellers will provide payment for the owner's policy of title insurance when their preferred title company is used.

Can all homeowner's choose their own title company?

YES! The US Government Accountability Office (GAO) issued a report in 2007 recommending that state and federal legislators and regulators improve consumers' ability to shop for title services based on price and service. Competition ensures fair consumer pricing for title insurance. Federal RESPA (Real Estate Settlement Procedures Act) laws prohibit any bank, broker or attorney to require a specific title insurance company be used.

I'm concerned about fair representation. If I close with you, how can I be assured that I am (or my client is) getting their own representation?

When West Title is indicated as the "seller's preferred title company", we understand any concerns you may have about your client's best interest. It's important to understand that the work completed prior to closing was requested by the seller's representative to insure marketable title to the property. This is in the best interest of all parties involved. When a contract is signed, we assign a specific closer in our local office with whom the buyer can communicate directly about any questions or concerns they may have, and who would be with the buyer on closing day to go over all the paperwork. In a closing transaction, the title company functions as an intermediate third-party to the transaction, representing neither buyer nor seller, so that any conflict of interest can be avoided.