Why is it necessary to purchase Title Insurance?

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