Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
A buyer purchases a property, with title insurance, and moves in. A month or two later it is determined that the seller who entered into escrow didn't have authority to sell the property. The legal owner of the property comes to claim what is rightfully their home.
Does title insurance refund the purchase price to the buyer, who is then forced to move somewhere else immediately? Or does title insurance protect the buyer to stay in the home that was purchased?
No policy lets you stay in the home. You can negotiate this with lawyers, but the legal owner is still the legal owner.
If you bought an owers policy.... As I understand it, if you put down $5k and mortgaged $95,000, the title insurance will work on getting you the $5k back. It will deal with the bank separately.
If you paid for a lender's policy.... you get nothing.
If you want to keep the house, get a lawyer, he may be able to negotiate with the person who sold you the house, giving the real owner the money, signing over the real deed, and you get to stay. Since that person could face criminal charges, there is a good chance he will do it.
No policy lets you stay in the home. You can negotiate this with lawyers, but the legal owner is still the legal owner.
If you bought an owers policy.... As I understand it, if you put down $5k and mortgaged $95,000, the title insurance will work on getting you the $5k back. It will deal with the bank separately.
If you paid for a lender's policy.... you get nothing.
If you want to keep the house, get a lawyer, he may be able to negotiate with the person who sold you the house, giving the real owner the money, signing over the real deed, and you get to stay. Since that person could face criminal charges, there is a good chance he will do it.
What if you made mortgage payments, home inspection payments, closing costs, etc. Are you refunded 100%?
If you have title insurance, the title insurance company researches the title and one of the things they look for is clear unclouded title by the person who is selling the house. Signatures are notarized, which means that the signer must have picture ID.
It would be very odd to be issued title insurance when you are buying the house from someone who doesn't own it.
No, you don't get to keep the house. Just like any other stolen property, it would be returned to the legal owner.
I hope you didn't buy it with a quit claim deed (in which case, the title company would not issue you title insurance, unless everything was carefully checked out for liens and ownership)
If you bought an owner's policy (usually in the amount of the sales price) then they would defend your interest. It's not too likely that they would have made a mistake, so most of the money goes towards defending your interest rather than paying you off because someone else owned your house.
A buyer purchases a property, with title insurance, and moves in. A month or two later it is determined that the seller who entered into escrow didn't have authority to sell the property. The legal owner of the property comes to claim what is rightfully their home.
Does title insurance refund the purchase price to the buyer, who is then forced to move somewhere else immediately? Or does title insurance protect the buyer to stay in the home that was purchased?
If you think about it, there is no way that purchasing a private insurance policy would be able to protect your right to remain in a house that you do not have title to. It means that, in the event of a title failure, any money that you lost due to said title failure will be recovered.
For example, there is a case going on in my area right now similar to this. Lady bought a house. Closed at a title company, got standard title coverage. After closing, was approached by a 3rd party (not the seller) stating that she owned the back few feet of the house and all of the backyard. Turns out, the house was built on 2 parcels of ground, each of which was owned by 2 different parties (the house and 1 piece was foreclosed on and owned by the bank, the back piece was not, and was still owned by the original owner), straddling the property line, and only 1 of those pieces was sold with the house.
The title company, in this case, did not make a mistake. The ground they sold exactly matched the legal description on the listing. If the buyer had paid for expanded title insurance, the title company would have gone to the property and walked the property lines, and would have discovered this problem. But the standard coverage does not cover them doing this. So this isn't the title company's fault. It is a legal issue between the buyer, the seller, the other owner, and the agents. It hasn't all hit the fan yet, but in my opinion, the title company has no fault in this case. They DID do exactly what they were paid to do. The piece of ground and the house that actually did change hands had no liens against them.
So if it is determined that you really aren't the legal owner, what your title insurance will cover depends on the policy. If that hasn't been determined yet, then the title insurance should cover finding out. I would suggest contacting all of the following about this issue if you haven't already: an attorney, your agent, and the title officer who did the closing.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
