The Importance of Purchasing an Owner's Title Insurance Policy when Purchasing Real Estate in Massachusetts
If title insurance were not so important, why does your mortgage lender require that you purchase a lender's title insurance policy at closing?
ANSWER: To protect the mortgagee's financial interests in the event that the title to the property were to become encumbered as the result of a lien, undischarged mortgage, or any other claim against the property which was not discovered during the title examination.
The title examination is performed by human beings (i.e. lawyers and/or title examiners). As a result, mistakes can be made during the title examination, which can create a serious and costly problem for you years later. Furthermore, not all claims against a property are necessarily recorded at the Registry of Deeds, meaning someone could have a valid lien against the property which is not a matter of public record.
Banks and mortgage companies know this all too well, which is why they require you, the individual, to purchase a title insurance policy which will protect the lender in the event of a title problem. This is called a lender's title insurance policy. Therefore, it only makes sense that you should also purchase a title insurance policy which protects you, the homeowner, in the event of a title problem. Unfortunately, very few people do so because they usually don't know anything about it or they do not understand it. "My bank says the title is ok, so I have nothing to worry about" is a statement that I hear much too often.
I strongly recommend that all of my clients and customers purchase an owner's title insurance policy when they purchase real estate in Massachusetts. In fact, I insist that my clients and customers purchase an owner's title insurance policy when they purchase real estate in Massachusetts. A one-time charge of between $2 - $4 per thousand is a relatively inexpensive investment when you consider how much you have at stake.
How do I purchase an owner's title insurance policy? The answer to that question is very simple. Prior to the closing, please advise the closing attorney that you want to purchase an owner's title insurance policy.
Copyright (C) Randal L. Struckus, 2007. All rights reserved.