Quote:
Originally Posted by Hanna D.
I have read that the title insurance company will pay "if the loan is invalid or uninforcable" this would insure the lender of protection if negligence happened on the part of the lawyer. Title insurance protects lenders from defective titles and I would hope that it also protects the innocent buyer from a lawyer that does not fill out the paper work correctly.
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One can "hope" all one wants, but it doesn't change the reality.
First, you are incorrect in stating what title insurance is: it specifically is for financial loss resulting from defects in the title.
Basically what that means is any liens that were missed on the property or irregularities in ownership. It has nothing to do with protecting an "innocent" (meaning one who doesn't do his own homework and is uninformed/uneducated?) buyer from a lawyer - as that would be a cause of action against the attorney. I don't know where you read anything about a loan being invalid or uninforcable (sic).
There are 2 kinds of title policies:
lender
owner/buyer
The lender's policy is to pay the lender for its financial loss. I don't know why you would hope or assume it would also pay the buyer who chose to be "innocent" and didn't buy a buyer's policy.
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