Title Insurance - For Everyone
I was recently eavesdropping on a new Realtor as he was explaining closing costs to his client. "...and of course the lender requires title insurance." The suggestion that the only good reason for the purchase of title insurance is because the lender requires it, reminds me of an old Bob Newhart comedy bit. He was the pilot on a DC1 flying to Hawaii under the banner of Mary Ellen's Stormdoor and Airline Company. Speaking over the intercom (a megaphone) he explained the reason for the company's ability to keep fares low was because they eliminated such frills as radar, compasses, radios and other such useless stuff. Not only from a lender's perspective, there is nothing unimportant abut title insurance on EVERY transaction.
Title insurance protects all parties from:
 | Fraud |
| Unfiled Liens |
| False Affidavits |
| Improperly Indexed Instruments |
| Forged Release of Mortgages |
| Unknown Heirs |
| Forged Deeds |
The purchase of "unneeded" title insurance is also one of the best ploys used by FSBOs (For Sale By Owner) to encourage buyers to eliminate such unnecessary frills as realtors. Too often, naive, would-be FSBO buyers are duped into closing transactions by eliminating the middle-men. We have all heard the horror stories from some unscrupulous sellers who have preyed on uneducated buyers.
All the supporting players in a real estate transaction have important roles...including the title companies.