1. A lender’s policy protects the mortgage company (the institution that owns your mortgage). If there is a fault in title that results in a loss, the mortgage holder will be paid back.
2. Owner’s coverage in Maryland is optional; and it is advisable that you purchase an Owner’s policy because it protects you, the homebuyer, against a loss that may occur from a fault in your ownership or interest you have in the property. A title policy will protect the equity in your new home, and the title insurer, without expense to you, will defend you against a possible claim on the title to your property as insured, however, claims occurring once the property is owned my not be covered. The one-time premium is small and you are protected as long as you or your heirs own the property.
3. Here are just a few title troubles that frequently occur. You may not discover them when you buy real estate – but months or years later, they can result in the loss of your property or an expensive lawsuit:
- False impersonation of the true owner of the land;
- Forged deeds, release, etc.;
- Errors in indexing;
- Errors in tax records (For example, listing payment against wrong property.);
- Deeds to or from defunct corporations;
- Undisclosed or missing heirs;
- Misinterpretation of wills;
- Deeds by persons of unsound mind (mentally incompetent);
- Deeds by minors; and Deeds by persons supposedly single but secretly married
