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We're in the midst of negotiating the purchase of a home here in New Mexico. When looking at the paperwork from the mortgage companies, included in the disclosures is not only the lender's title insurance policy (which I expect to see), but also an "Owner's" title insurance policy . . . with no mention of the latter being optional.
1) Can anyone confirm that this is, indeed, optional in NM?
2) The lender's policy is either spelled out as such, or (I'm assuming) is lumped in with "closing" or "settlement" costs, and is $8-900 on a 320K home. Is this in line?
3) The "owner's" policy is between $1,850 and $2,000 (in addition to the $8-900 just spent on the lender's policy), which sounds insane to me. Is this something that can be price shopped, or is it something that has only a regulated ceiling with all the companies shockingly hovering independently right around the top?
As an aside, I understand all the selling points (and detracting points) of an owners policy -- no need to rehash that here. But even if things went South at some point and it cost 5K in legal fees to sort it out, what are the chances of that happening? Pretty slim. Slim enough that $2K cost up-front doesn't sound too enticing for a 5% chance of having to spend $5K. Am I missing something here? Isn't this really just another profit center for the title companies?
Sorry I can't really answer your question. Except to say that when we bought a house 2 years ago I couldn't believe all the extraneous fees we to pay... and the seller much more of course, with the realtor fees. I was too drained to investigate it though... just wanted it over with.
IIRC all of the houses my wife and I have bought required us to have title insurance. We always financed the houses, though, and none of them have been houses in New Mexico.
IIRC all of the houses my wife and I have bought required us to have title insurance. We always financed the houses, though, and none of them have been houses in New Mexico.
LENDER INSURANCE - protects your lender against any loss that might occur due to unknown title defects. It also guarantees the lender to have a valid first lien against the property.
OWNER INSURANCE - protects you, the buyer, from issues that might emerge after you close the sale. Example of issues may include human error, forged documents, undisclosed or missing heirs, and incorrect legal descriptions.
We purchased a home here in NM in 1998 and we did not pay cash, we had/have a conventional VA Guaranteed mortgage loan, we did not pay any down payment, we did have other fees. There was a Funding Fee. We did not get OWNER INSURANCE...
The other residence was purchased in NM in 1999. It was an investment with four individuals forking over cash for the purchase. We did have some type of renters insurance (on and off) but there was no Lender Title Insurance or Owner Title Insurance. I am a silent partner on this venture.
The "Think New Mexico's Title Insurance Reform Initiative" does not mention what type of title insurance, as best as I can tell, it was a change in the law that allowed a buyer to shop for the insurance where in the past it was a fixed rate on the price of the insurance.
I am not a real estate agent (was in the 70's) nor licensed in these issues...
Last edited by Poncho_NM; 09-24-2014 at 01:02 PM..
The bank/leander is supposed to do a title search to find if there are any lien holders. It seems to be redundant to have an Owner's Title Insurance Policy too. I didn't have either one when we purchased our land out in Catron County or in Rio Arriba either.
The bank/leander is supposed to do a title search to find if there are any lien holders. It seems to be redundant to have an Owner's Title Insurance Policy too.
As has been said, buyer's title insurance covers any problems that might arise after the sale. In my case it turned out that the surveyor was incompetent when setting the corner stakes before I signed the final papers. It was a couple of years later that I found out about the changes to my property lines that occurred after the initial platting of the subdivision - changes that the surveyor should have been aware of. The title company was responsible for ordering a new survey and changing my deed to reflect the changes at no cost to me.
The bank/leander is supposed to do a title search to find if there are any lien holders.
There are a few other items.
Quote:
Originally Posted by MattieJensen
It seems to be redundant to have an Owner's Title Insurance Policy too.
But if there is a discrepancy, they only cover themselves, the amount you still owe the company you borrowed money from.
Quote:
Originally Posted by MattieJensen
I didn't have either one when we purchased our land out in Catron County or in Rio Arriba either.
That is your prerogative. You will pay for title insurance if you get a home construction loan, or you will get a very high interest rate on that loan.
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