Congratulations! You’ve found the home of your dreams, your mortgage is lined up (You’re welcome), and now you’re off to the Notary or Lawyer’s office to finalize the contract. You notice a $150 dollar charge for Title insurance, and you question why you need it. I don’t blame you. Likely you’re upset that you’re paying property transfer tax, notary charges and potentially mortgage insurance. And now Title Insurance?! Well let me tell you, you want Title Insurance. Why? Let me tell you.

First off, all lenders request title insurance to protect against fraud and costs associated with what seems to be a growing crime. More so, there are other benefits for the homeowner.

1. Risk is transferred from the home buyer to the title insurance provider in case of fraud. If their are any delays or issues that occur on title during the purchase process, the insurance provider resolves it and any other associated costs.

2. Your policy covers losses associated with both survey issues and title defects that existed prior to the home purchase, as well as title fraud occurring after once the policy is in place. Your coverage continues as long as you own the home. Title insurance also covers losses such as: structures or renovations previously completed without required permits, liens, encroachments, unknown work orders, zoning and by-law violations.

3. Your policy will protect you against any future title fraud on your property. For properties with a clear title and no mortgage, there’s a risk that someone can assign a mortgage against your property without your knowledge. They get the money and take off, leaving you with a mortgage and the payments.

                                                                         Who’s at risk?

A homeowner with no existing mortgage. That being said, a property owner with a mortgage can become a victim. In both cases, mortgage fund is usually sent to a third party and often unrecoverable. Therefore, lenders want homeowners to have title insurance so they can transfer the legal cost of fighting the case to the title insurance provider.

What to expect if you’re a victim of title fraud?

Unfortunately the homeowner is responsible to prove the crime occurred. During this time they could be responsible for the mortgage and associated payments. If unpaid, this can result in foreclosure on the property by the lender and damage the owner’s credit report.

If you become a victim in a real estate title fraud, it can take considerable time and money such as:

* Legal costs showing proof you’re the victim
* Increased stress
* Possibility of losing your home to foreclosure by the lender

Title insurance will cover legal expenses and many other costs related to restoring title in cases of real estate title fraud. For homeowners who haven’t obtained title insurance when buying their home, never fear, protection title insurance can be purchased any time. Contact your lawyer or a title insurance company. Fees will range depending on the value of the property.

Here is a link that outlines the costs associates to title insurance and fraud for your reference.

Best,

D