Page 12 - Montana Home Sellers Guide
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What is TITLE INSURANCE
WHAT IS TITLE INSURANCE? WHAT CAN TITLE INSURANCE PROTECT AGAINST?
Your lender must insure that the quality of the Here are just a few of the most common hidden
title to the property you are about to buy, and risks that can cause a loss of Title or create an
which you will pledge as security for the loan, is encumbrance on Title:
satisfactory. The lender does this by obtaining a
lender’s policy of title insurance, often referred • False impersonation of the true owner of the
to as the ALTA lenders title policy. property
• Forged deeds, releases of wills
The lender’s title policy protects the lender • Undisclosed or missing heirs
against loss due to unknown Title defects at • Mistakes in recording legal documents
the time of closing and in the future. This policy • Deeds by persons of unsound mind
only protects the lender’s interest. It does not • Deeds by minors
protect you. That’s why you need an owner’s • Deeds by persons supposedly single, but in fact
title policy, which will be issued at the same married
time as the lender’s policy for a one-time fee. • Liens for unpaid inheritance, income of gift taxes
• Fraud
HOW CAN THERE BE A TITLE DEFECT IF THE
TITLE HAS BEEN SEARCHED AND A LOAN WHAT PROTECTION DOES TITLE INSURANCE
POLICY ISSUED? PROVIDE AGAINST DEFECTS AND HIDDEN RISKS?
Title insurance is issued after a careful Title insurance will pay for defending against lawsuits
examination of copies of the public records. Even attacking your Title as insured, and will clear up
the most thorough search cannot absolutely Title problems or pay the losses. By combining
assure that no Title hazards are present, despite expertise in risk elimination at the time of issuing a
the knowledge and experience of professional policy, and protection against hidden risks as long
Title examiners. In addition to matters shown as the policy remains in effect, your Title insurance
by public records, other Title problems may protects against title loss.
exist that cannot be disclosed in a search.
Never buy a home without your Owner’s Title Policy!
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