Danyelle, Home Buyer in Miami, FL

Can someone explain to me why title insurance would NOT be needed on a VA owned home? I know its optional, I've done my research but I'm

Asked by Danyelle, Miami, FL Mon Nov 7, 2011

concerned.. I know it's optional, & typically the seller pays this however because it's VA owed they do not pay doc stamps or OWNERS title insurance. I guess what I'm looking for is an actual explanation as to why they are not necessary on VA owed properties! The title company want's us to purchase it but then said it was optional and typically not needed on VA owned homes??!?!?!?!?

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11
Danyelle, Home Buyer, Miami, FL
Tue Nov 8, 2011
its 1200... not cheap in my book. but I digress.. clearly my original question is not getting answered by this online forum.I'll try someplace else...
1 vote
Lila Lopez, Agent, South Miami, FL
Thu Nov 10, 2011
Good Morning,

Just for clarification, Title insurance , lender's coverage is needed regardless of the loan type, be it conventional, FHA or VA. When it comes to the Owner's Title policy, it is not required on to be purchased whether the loan is conventional , FHA or VA. This is an optional insurance that home buyers are well advised to purchase, and the cost when an Lender's policy is purchased is not a huge amount. You need to keep in mind that the Lender's title policy protects the lender in the event that there are any types of title defects, or if anything was missed when a title, lien search was conducted. The Lender's policy does to a certain degree cover the owner, but the true insured party is the lender. For the cost of the Owner's title insurance, you as the homeowner would have coverage that protects your interests. This is not required but very highly recommended, if a buyer chooses to not obtain a the Owner's policy, then at time of closing they would sign a waiver releasing the title/closing agent from any future claims should a title issue arise at a later date.
0 votes
Danielle Sha…, Agent, Cape Coral, FL
Tue Nov 8, 2011
No one has said that it is not necessary on VA owned properties. Just because the bank that owns the property does not wish to pay for it does not mean that it isn't necessary. What does your agent have to say in all of this???
0 votes
Ron Thomas, Agent, Fresno, CA
Tue Nov 8, 2011
My B.S. indicator is way off the dial:
The VA is not in the TITLE business!
I doubt very seriously that anyone from the VA would recommend not getting a Title Policy; it is cheap insurance.

Good luck and may God bless
0 votes
Lila Lopez, Agent, South Miami, FL
Tue Nov 8, 2011
Good Morning Danyelle,

I honestly do not know why it would be an optional on a VA loan versus another loan type. From my understanding the lender title insurance policy does cover a great deal in protecting your lender from any potential title issues that may not appear when a title and lien search is done. Given that in most cases on a VA loan the buyer is purchasing with 100% financing, the VA ends up getting full coverage for any items that may affect title and their lien on the property. Given the VA watches out greatly for their borrowers, I know that they want to ensure that you are not paying for any fees that are either unneccassary or outrageously high. As I stated , I am not clear why it would be optional, my strongest suggestion is to as the question again to the closing agent/title company, and you may also wish to consult a real estate attorney for a throurough understanding of why it is an optional item. Good luck with your home purchase.
0 votes
Cynthia da…, Agent, Miami, FL
Mon Nov 7, 2011
I forgot to mention that the cost of the owner title policy is very small as it is "simultaneous issue" with the lender coverage, so there is another reason to obtain it.
0 votes
Nereida Figu…, Agent, Miami, FL
Mon Nov 7, 2011
Va no need mortgage insurance and for that reason Va guarantee any VA loan. If you don't paid your VA loan because they guarantee it they will paid all. Optional is the Title Insurance, but up-to-date, there are many homes selling in the Real Estate Market with hide problems. A loan is guarantee by Veteran Affairs they will be in charge to cure.
0 votes
Danielle Sha…, Agent, Cape Coral, FL
Mon Nov 7, 2011
On our coast it's typical that seller pay (and also choose the title company). The bank doesn't have to make sure they have clear title when they foreclose - look at all the cases coming back now - but they do have to have clear title to transfer to a new owner. I wouldn't be as worried about owner's title insurance as making sure YOUR investment amount is covered in the property. Make sure the title company provides you with a copy of the lien search.
0 votes
Danyelle, Home Buyer, Miami, FL
Mon Nov 7, 2011
Incorrect it is lenders insurance that is required, owners title insurance is optional but suggested. I just want to know why I've read so much information online stating its silly to purchase OWNERS TITLE insurance specifically on a VA owned property. Closing is in 14 days. I'm aware of the reasons why one should get an owners title insurance policy however that is NOT my question.I'm not looking for someone to talk me into/out-of purchasing it I just want to know why It's commonly NOT purchased when going through A VA Owned property (with a conventional loan) I'm assuming because VA has to make damn sure the title is clear before they take the property????
0 votes
Cynthia da…, Agent, Miami, FL
Mon Nov 7, 2011
I would be surprised if it is optional. The seller does NOT typically pay for title insurance in this area- only if they choose the closing agent, such as foreclosed homes, do they pay the title insurance. In Dade, the seller typically pays the doc stamps on the deed transfer, buyer pays fees to record mortgage note and also endorsements
0 votes
Danielle Sha…, Agent, Cape Coral, FL
Mon Nov 7, 2011
It has nothing to do with necessary or not. It's really more about costs that the bank doesn't wish to incur. Doc stamps are typical for VA/HUD/Fannie Mae/Freddie Mac - they're tax exempt since they are government owned. Factor the cost of doc stamps into your offer; I've successfully done that for just about every Fannie/Freddie deal (VA & HUD are not as common in my market). Some banks choose not to pay for title insurance. Again, factor the cost into your offer. You definitely want to have title insurance and if you are purchasing with a mortgage will need it.

Having too much insurance is way better than not having enough...particularly with the amount of foreclosed homes out there and potentially questionable title. Protect yourself and buy it.
Web Reference:  http://www.mysharphomes.com
0 votes
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