Friday, July 14, 2017


Home with an Owner’s Policy

There are two types of title insurance: owner’s title
insurance, called an Owner’s Policy; and lender’s title
insurance, called a Loan Policy. Most lenders require a
Loan Policy when they issue you a loan, and the fee is
usually based on the dollar amount of your loan. It only
protects the lender’s interests in the property. It does not
protect the buyer.
A recent news article tells of a homebuyer who purchased
a home on a land contract and made monthly payments
of $1500 to the seller until they were able to secure a loan
from a national lender. At the time, the lender required the
buyer to purchase a Loan Policy. Because it is not required
by law to purchase an Owner’s Policy, the homebuyer
closed on the home with only the lender’s interest being
protected by the Loan Policy.
Several years later, the owners of the home were notified
that their house was being foreclosed on and the sale date
was fast approaching. How could this have happened? As
it turns out, there was a prior loan on the home that was
never paid off by the previous owner. Because the current
lender had required a Loan Policy, their interest in the
property was covered. Had the current owners invested
in an Owner’s Policy, they too would have been covered.
Unfortunately, without title insurance, they lost their home.
Additionally, the resulting foreclosure may adversely affect
their credit standing for years to come.
The homebuyers in the story above stated,
“We didn’t buy title insurance. We were
first-time homebuyers. Had we known about
title insurance, [we] definitely would have
gotten it.”
Many homeowners mistakenly think that because a title
search has been done on the property their interest is
One thing is certain…If more homebuyers were aware
of the protection a First American Title Owner’s Policy
provides, they would purchase one, and eliminate the
unnecessary risk of losing their home.

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