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Title insurance protects the owner from financial loss in the
event problems arise regarding the ownership of the property. This is called the
Owner's Policy. Even with the most careful title search, there may be hidden title
defects. The policy is designed to protect you from any title defects that existed
before the issue date of the policy. Title insurance will also pay the cost of defending
against any covered claim. This is typically purchased by the seller.
Your lender will
probably require you to purchase a Lender's Policy as well. This protects the lender,
not you. The Lender's Policy insures that the lender has a valid, enforceable lien
on the property. This is typically purchased by the buyer.
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Examples of Title Defects are:
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Creditor Claims |
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Deeds executed
under false or expired powers of attorney |
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Mistaken interpretation
of wills and trusts
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Incorrect representation
of marital status |
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Undisclosed
heirs |
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Mistakes in
recording legal documents
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Incorrect legal
descriptions |
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Forged deeds,
releases, etc. |
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Federal, state
inheritance and gift tax liens |
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Errors in tax
records
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Federal condemnation
without notice filing |
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Capacity of
foreign fiduciaries |
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Duress in execution
of documents |
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Want of jurisdiction
over persons in judicial proceedings |
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Deeds from
minors or non-existent entities |
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Discovery of
later will after probate of first will |
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Easements of
prescription not discovered by a survey
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Deeds delivered
after the death of grantor or grantee, or without consent of grantor |
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