Financing in Fort Lauderdale>Question Details

Alison Hillm…, Other/Just Looking in San Francisco, CA

Why can't they simply carry over the lender's title insurance one purchases with their original mortgage loan?

Asked by Alison Hillman, San Francisco, CA Fri Feb 15, 2013

Help the community by answering this question:


Because people do nasty things that don't come to light until a Titke search is completed. Like sell the property to someone else, pledge it as security for loans etc.

Where do these questions come from?
0 votes Thank Flag Link Fri Feb 15, 2013
Hi Alison,

Mark and Kevin are right with their answers but there is also the "profit" factor. Title insurance companies get to sell a brand new policy each time a title transfers to a new buyer, imagine that....

Personally, I think that it would be a fair and reasonable compromise if title policies would carry over on a property for a "transfer fee" or a reduced premium (i.e. the original policy was sold for $1,000 and each subsequent buyer would pay, say, $300 to carry it on).
2 votes Thank Flag Link Sat Feb 16, 2013
Circumstances often change between one sale and another. A current owner may have had work done on a house that required a permit but never had that permit closed. Or, maybe the owner had a dispute with a contractor, did not pay the bill, so the contractor placed a lien on the property.

Or, perhaps the current owner has taken out additional loans against the property.

All of these aspects, and many more, are explored by the title company when a contract on a property is submitted.

It is their job to insure that a new owner takes possession of a property with a clear title. That means no one else has any legal or financial claim on it except the new owner.

Marc Jablon, The Jablon Team
RE/MAX Complete Solutions
1 vote Thank Flag Link Fri Feb 15, 2013
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