BritGuyTN

what i was thinking was that if the lawyer works for the title company then any way you look at it either he or his company profits.....

AdobePinon

OK, two policies seems a little weird to me. I don't think you should be taking one specifically for the lender. (I only have one - for myself.) Here's how I see it: Two years down the line, some guy next to you claims you've appropriated his property. You lose the case, and your property value decreases. If you have your own policy, the lender is automatically protected because you get your money back and can afford to repay the lender for the overvaluation (which is probably buried in a mortgage clause somewhere). If you have a policy for the lender, the lender might get paid twice because you are probably still personally responsible for paying back the difference, even if the lender already got paid for his loss. (Kind of like employers who take out life insurance on their employees.)

Texas Brit

I am a real estate lawyer BUT I never do residential home sales (commerical only, and that is very different).

That said, here's my 2 cents (NOT LEGAL ADVICE) . . .

It is typical that you have to buy a policy for your lender and can elect to buy one for yourself. All depends on local practice, but as a general rule it is typical for the seller to pay for your owner's policy and you to pay for your own lender's policy. Most people get both. In the commerical situation (which I am much, much more familiar with ), the owner's policy usually is only a nominal fee over the lender's policy (as the title company is already exposed). Endorsements, which vary by state as to availability, can change things, but are not really too much of an issue in the residential context unless there are some unusual facts.

This isn't legal advice as I don't know your situation, but, other things being equal, you probably should get the policy. I wouldn't dream of buying a home without title insurance.

Again, NOT legal advice (did I say that already?) -- I don't know your situation or even where you are.

I don't know how things work in your state in residential deals, but I'd be suprised if your lawyer is getting a commision. Easy way to find out, by the way . . . ask him or her. Don't worry about offending (lawyers have pretty thick skins!).

Manc

so was that legal advice or not?

AmerLisa

lol....a lawyer covering his "thick skin"

BritGuyTN

I think it is fair to say that the mandatory insurance for the lender is not title insurance, it is hazard insurance (normal home isurance for structure and contents)

I would go ahead and get the title insurance but do look around for the best price

fatbrit

Repeat after me for true forgiveness: peccavi, peccavi, peccavi.

Texas Brit

Actually, the reason I like ("like" may be an overstatement) being a commercial real estate lawyer is that is one of the least offensive types of law to practice. Most of time everyone is happy to be doing their deals and there's rarely much bickering and the majority of people are ethical and above-board. I know, its hard to believe. I've never been in a courtroom as a real estate lawyer and that's pretty typical. For the most part we are just putting together business deals and papering them.

So I only need one peccavi.

(By the way, sorry for all the disclaimers. We can get into hot water if we don't do all that lark.)

Texas Brit

No, title insurance is a separate requirement and they pretty much always want it.

The price, depending on your state, may be fixed by the insurance regulations, in which case there is no really shopping around to be done. (How's that for free trade?)

fatbrit

Many of the lawyers on here put a disclaimer in their signature line so as not to establish an attorney/client relationship. Some of them are laughably long enforcing the stereotype, but it may be worth putting a short sentence in now you've come out of the closet.

Texas Brit

Yeah, I use one of those. Bit much for the board though, particularly as I try to avoid law talk anyway on here. Anyway, most of time I'd rather not draw attention to the fact that I am of those who have gone over to the dark side.

fatbrit

Mum's the word!

Pulaski

I discovered, long after I bought my house, that the primary purpose of title insurance is not to protect against "disputed ownership", in terms of was the vendor really a squatter, or does a neighbor have title deeds that overlap with the property you are buying. The real purpose/ benefit of it is to protect against the property having been used as collateral for a loan, or conditional collateral - i.e. someone being able to slap a lien on the property for a debt that the previous owner incurred.

Lesley1020

Wow! I am amazed to hear that the owner's policy is the bulk of your premium! I work for an attorney who is part of Stewart Title and work out the premiums for folks every day and the lender's policy is always the most expensive, owner's is very little in comparison (couple of hundred, typically). I haven't yet seen anyone who hasnt taken the owner's policy but I think a lot of people assume it is mandatory, like the lender's policy. Personally I would rather take it and not worry, but everyone is different! Also, check what your contract says - the title company providing the insurance will most likely be in there - just in case you had thought of shopping around, might not be able to if it's already in there. We have had issue with having to make claims on old policies on properties we are selling lately that have come up with old unreleased warranty deeds - people that had taken out home equities a couple of weeks before selling, and if the other atty doesn't get the title "down dated" the day before closing - there is no telling what can be out there - in the case of one recently - a guy whose house had a lien over it from the previous owner for $120K - therefore meaning he couldn't sell the house with clear title - so would have to be a claim made in a case like that.

Franklin

Owner's title insurance is a good idea ...

Also, it is quite possible for a buyer to later mess up the title under a doctrine found in Commercial Paper law; this kind of mess up may not be covered by the title insurance since it is based on neglect of the buyer who fails to record the deeds of his new property in the appropriate place thereby failing to give notice to possible subsequent buyers who may buy from "Party A". To avoid this mess, make sure that appropriate paperwork is recorded in the registrar of deeds or the functional equivalent in your state. This goes to something called Commercial Paper law, which I don't want to go into here suffice to say it is possible, absent recording the proper documents in the registry of deeds, to end up forfeiting ownership to your house if Party A decides to sell the same property to party C who buys for value without notice (i.e., the deeds were not found in the registrar of deeds or its functional equivalent in your state) ends up owning the property despite the fact that you (Party B) bought the same property from Party A. It's plain Commercial Paper law baby, avoid this mess ... make sure your deeds are properly recorded at the registrar of deeds (or its functional equivalent in your state).

Commercial Paper law is tested on the Bar, so I had to learn it inside out. Dead boring, but it was an eye opener to me how someone (Party C) could end up owning the same property previously purchased by Party B; it's a public policy matter. Of course, Party A is committing a fraud, but this does not stop Party C owning the same property if Party A failed to record the deeds in the proper place. Don't fall into this mess -> record the deeds!