Title Insurance and its importance in your transaction:

Real estate title insurance is a type of insurance that guarantees ownership interest in real estate. Title Insurance eliminates and assumes risk, while other types of insurance just assume risk.  The policy guarantees that the property being purchased or mortgaged is free from old liens or mortgages not released of record or not paid off and it guarantees additionally that any confusion as to rights of ownership will be resolved in favor of the party owning the real estate or the title insurance company will be liable for loss in value to the policyholder up to the policy limits.

Ohio is a buyers' choice state and the consumer can choose who will provide them with Title related services. The buyer or borrower is not required to use a title company selected by someone else. If the realtor or lender has offered to prepare a title insurance application, the buyer can direct the realtor or lender to place the title order with Wayne County Title Agency, Inc..

Title insurance rates are approved by the state of Ohio, and there is no difference in insurance rates between agents. The buyer or borrower will typically want to choose a title company based on their quality of service and their ability to make the closing happen timely.

Title company fees consist of the charges to coordinate the closing and to provide title  insurance.  The  charge  for  Title  Insurance  Premium  is  based  on  a  rate schedule for the greatest amount of coverage provided on a Lenders or Owners policy.  Additional  fees  can  include  Title  Examination/Search  Fees,  Title Commitment  fees, and additional  coverage  endorsements  (based  on filed rates with the State of Ohio)

A buyer purchasing real estate is offered the opportunity to purchase an owner's policy of title insurance by  Wayne County Title Agency, Inc. If you are obtaining a mortgage to help you finance the purchase from a bank or mortgage company, that institution will require an examination of the title to the property and have the party reviewing the title issue to them a lender's policy of title insurance which insures the lender's security interest against loss due to defects in the title that were not discovered at the time of sale or the time of refinance.   A loan policy offers no protection for the homeowner.

Since  the  settlement  agent,  attorney,  escrow  agent  or  title  agent  is  already issuing a lender's policy of title insurance, the buyer has the opportunity at that time to obtain an owner's policy of title insurance at a cost substantially less than the buyer would pay if the policy was not written simultaneously with the lender's policy.

The owner's policy of title insurance insures that the owner has good marketable title to the property free of any encumbrances or liens that would adversely affect the property, except those made known to the buyer, and insures to the owner that  if any  such  liens,  encumbrances,  defects  or other  title  problems(which occurred prior to the date of the policy)  become known the title insurer will defend the buyer's title to the property.

In many instances we are asked whether or not title insurance is necessary or advisable for the owner to purchase. We recommend the purchase of the title insurance for some very simple reasons. First, the premium for purchase of the title  insurance  policy  is  a  one-time  charge.  Since  the  purchaser  is  usually borrowing money to finance the purchase, the majority of the cost of the title insurance  policy  that  the  owner  would  receive  has  been  paid  through  the premiums for the lender's policy which is required by the loan. Usually for a few hundred dollars or less, the owner can insure against a variety of problems which could occur in the future. The following items include a small example of some of the protections found in an owner's policy, but not all:

  • Forged documents in the chain of title.
  • Signatures  of mentally  incompetent  persons  which  are unknown  to the party reviewing the title.
  • Signatures of minors which are unknown to the party reviewing the title.
  • Deed from corporation, unauthorized under corporate bylaws or given under falsified corporate resolution.
  • Deed from purported trustee, unauthorized under trust agreement.
  • Mistakes or inaccuracies in recording of legal documents of title at the appropriate place or recording or registration of title.
  • Deed  challenged  as  being  given  under  fraud,  undue  influence  or duress.
  • The handling of the recording or indexing of the recorded documents
  • Undisclosed or missing heirs
  • Fraud in the execution or in the handling of a transaction in the prior chain of title
  • Invalid divorces or misrepresentation  of marital status of the parties signing the documents
  • Clerical errors in the public records
  • Claims of parties unknown because their claims have not been filed in any indices of public record.

Enhanced policies exist that go well beyond these simple coverages and provide coverage for a host of issues that can affect property both prior to and after you purchase it.

Even  though  the  buyer  may  be  asked  to  pay  for  the  lender's  title  insurance protection, the lender's policy of title insurance does not protect the buyer and a claim can only be made if the lender suffers a financial  loss because  of a title defect that adversely affects a foreclosure  of the buyer's mortgage. There have been many defects in titles which could not be revealed by an examination of the public  records.  These  defects  usually  arise at a time after the transaction  has taken place and purchasers can suffer significant losses as a result of them. That is why owner's title insurance makes a great deal of sense.