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Title insurance is crucial to protecting your investment in real estate. Many homeowners focus on physical security measures like smoke alarms and deadbolt locks, but what about protecting your ownership rights? This is where an Owner’s Policy of Title Insurance comes into play.

Simply put, a Loan Policy of title insurance only protects the lender’s interest, leaving the landowner vulnerable. If you lose title to the land, you could still be on the hook for the debt owed to your lender. Even more concerning, if a claim is paid on the Loan Policy, you may need to reimburse the title insurer for the claim paid to the lender.

Imagine building equity in your land over the years, only to lose it due to a title claim. This scenario is avoidable with an Owner’s Policy of title insurance. This policy protects your interest in the land, and you must purchase it separately from the lender’s policy.

An Owner’s Policy can be obtained for a one-time premium. It covers you for as long as you own the land or have liability under a title warranty when you sell the property. Additionally, the policy covers the cost of defending you if you are sued over a covered matter.

But what exactly does an Owner’s Policy cover? It protects against a range of potential issues such as someone else claiming ownership of your land due to a break in the chain of title, fraud, forgery, or undue influence over an incapacitated person. It also covers claims of liens on your land, blockages to your legal access, and more.

When considering title insurance, it’s essential to understand that a title insurance commitment is not an Owner’s Policy. It merely outlines the coverage that will be provided in the Owner’s Policy. Always ask to review a title insurance commitment for an Owner’s Policy and get a quote for its cost before deciding.

Your home may be new to you, but every property has a history that could pose hidden issues in the chain of title. An Owner’s Policy of Title Insurance protects your investment from errors in public records, unknown liens, illegal deeds, missing heirs, and more. Unlike other insurance models with ongoing premiums, title insurance is a one-time premium paid at closing.

Fixer-Upper Fail

Title insurance is a type of insurance that protects a property owner or lender against financial loss in the event that there are defects in the title of the property. These defects could include issues such as unknown liens, legal disputes, or other problems that could affect ownership rights. Title insurance ensures that the property owner has a clear title and provides protection against any potential issues that may arise in the future. It is typically purchased during the process of buying a home or refinancing a mortgage.

Once upon a time, there was a man named Alex who had purchased his dream home in a beautiful neighborhood. He was thrilled to finally own a place he could call his own and had big plans for the future. However, Alex decided to forgo getting title insurance to save a little money at the time of purchase.

Years passed, and Alex lived happily in his home until one day, he received a notice that the property he thought was his had a clouded title. It turned out that there was a long-lost heir to the property who had a legal claim to it. Without title insurance to protect him, Alex now faced the risk of losing his home.

Frantic and worried, Alex tried everything he could to fight the claim, but without the protection of title insurance, he found himself in a losing battle. Ultimately, he had to give up his home and start over again, learning a valuable lesson about the importance of title insurance in the process.

From then on, Alex made sure to always get title insurance whenever purchasing property, understanding that it was a small price to pay for the security and peace of mind it provided. And though he lost his home, he gained a valuable lesson in the importance of protecting his investments for the future..

What is Wire Fraud?

Wire fraud – Just those two little words can send shivers down your spine. No one thinks it will happen to them, and no one understands just how prevalent it is in the real estate industry. Unless you have been living under a rock for the last couple of years, you know that the world has gone fully digital for all things shopping, selling, communicating, and more thanks to COVID-19.

With this drastic turn to all things digital, these swindlers have quickly adapted to this new world. Real estate and rental fraud ranks #7 out of more than 30 types of fraud according to the FBI. Learn how to protect yourself and your clients by identifying the common red flags in email communication seen below.

What are the Red Flags?

1. Grammar/Syntax:

• Use of the word “kindly.” According to industry reports, most cybercrime is committed by fraudsters overseas where this word is commonly used instead of “please.”
• Negative Words or Unusual Sense of Urgency. The email states/implies there are consequences to not following the instructions. Are they instructing you not to verify information or changing information previously established; does it make since in this transaction?
  • “Failure,” “must not,” “avoid,” etc.
• Grammar mistakes.
  • Missing punctuation, misspelled words, improper syntax, incorrect formatting, etc.

2. Changes in Wiring Instructions:

• Change in instruction that differs from previous communication.
• Different font or type size from the rest of the document.
• Receiving bank does not match the payoff statement.
• Recipient’s name on the account differs from original party or lender.

3. Spoofed Emails:

• Always check domain names when receiving emails, and when replying to emails.
  • employee@choicetitle.com (NOT employeechoicetitle@gmail.com)
• Good rule of thumb is to “Forward” not “Reply” to emails and re-type the needed recipient email addresses.
  • A spoof email can appear legitimate until you hit “Reply” and the domain name changes.

How can you stay protected?

• Ensure your passwords are strong and use two-factor authentication for your email account.
• Communicate with trusted, known telephone numbers when discussing wiring instructions.
• Check your email rules & alerts regularly.
  • Ensure your email settings do not have auto-forwarding to unknown addresses or other rules not created by you.
  • Check your Sent folder regularly. Ensure you have no emails in your Sent folder that were not sent by you.

An open mortgage is a common cloud seen on title…but what exactly does that mean and how is it fixed?

A mortgage is considered open if it has not been fully paid off, or if it was paid but not cancelled in the record. This presents as a cloud on title because it represents a claim by the lender on the property. The lender has a legal right to the property until the mortgage is paid off in full. This can cause issues when trying to sell or transfer property without first satisfying the mortgage.

If the open mortgage is due to a mortgage not yet paid off, we reach out for a payoff letter. This shows us how much money is still owed and what must be paid off to successfully transfer ownership. We take this amount from the seller proceeds and record the cancelled mortgage in the record.

To process an open mortgage resulting from a paid-off mortgage that was not recorded as canceled, we contact the previous title company and request a letter verifying that the loan has been paid off. Once we have obtained this letter, we then record the cancellation in the record and can move forward with closing.

This title cloud is a (usually) relatively easy process and can be fixed before closing to ensure no delays.

A succession is the legal process of settling a deceased person’s estate and distributing the property (after paying all debts).

Real estate professionals will want to ensure that the person trying to sell a property has the proper authority to do so. This can mean the property has been through succession, and the person selling has a Judgement of Possession or has been appointed as independent administrator/executor.

• Independent Executor – appointed when the deceased person left a valid will that designates an executor who can act without court supervision.
• Independent Administrator – appointed when all heirs agree on the person to represent the estate who can act without court supervision.
• Judgement of Possession – a court order that officially transfers ownership of property from the deceased person to their heirs

Five reasons filing a succession is a crucial step before selling property:

1. Ownership Transfer – it is impossible to transfer ownership of the property to a buyer legally without filing a succession. This is because the property’s title remains in the name of the deceased. Only the succession can transfer ownership to the heirs.

2. Clear Title – filing ensures that the property’s title is clear. This process involves identifying all heirs and creditors and resolving any issues related to the property’s ownership or debts owed.

3. Protected Interests – filing a succession protects the interests of all parties involved. This ensures that we respect the deceased person’s wishes and distribute their assets according to their will or Louisiana law. This also ensures that the buyers are purchasing the property from its rightful owner and that no legal disputes could arise.

4. Expedite the Sale – while this process can take several months to complete, it is a necessary step before any sale can take place. After completing the succession, the executor can list the property for sale, and interested buyers can proceed with the purchase.

5. Peace of Mind – without filing, there is a risk of legal disputes and delays that can be costly and time-consuming. A succession ensures that the sale is legal and that all necessary steps have been taken to protect everyone’s interests.

The process of succession can take a long time and become confusing, but it guarantees the legal transfer of property ownership, ensures a clear title, protects the interests of all parties involved, expedites the sale process, and provides peace of mind.