Title Insurance with a Mortgage ReFi

[ijusluvit]

I'm in the process of refinancing my mortgage through Citizens. It hasn't been as simple a process as I'd hoped, and I'm not getting timely or direct answers to all of my questions.

One direct question clearly answered however was that title insurance to protect the lender's interests was required. This will cost me over a thousand dollars.

What I don't understand is why title insurance is required for a refinance. I bought my home seven years ago through Citizens, and paid for title insurance. Why would that policy lapse and another be required? Nothing happened in the seven years to jeopardize my ownership or the bank's interest. There will be no change in the deed or listed ownership, and the company brochure states that title insurance remains in effect for however long the owner or his heirs own the home.

Anybody ever been able to talk their way out of this requirement?

[Biker Dog]

Being retired from the mortgage business I agree that it is a ripoff. Even making it worse is that you are going with the same leander. They will tell you it covers their interests incase there is a lean on your property that doesn't show up in their title search. They search the title and if they miss something I believe it shoulld be their problem but they force you to insure for thier mistakes.
Also they will tell you they are saving you money by selling you the policy at a "Reissure Rate." Just more money in their pocket. With all the fees they tack on, you need to calculate if the lower interest rate will actually save you money over the life of the loan.

Good Luck

[Snowbirdtobe]

You should look at other banks and lenders and not just go with a bank that has unreasonable policies.
Get a quote from a mortgage broker. Rates are very very low. We found Citizens hard to even get in touch with last year.

[CTgolfer]

I too have never understood why a new title needs to be searched for re-financing. We also came across this problem when we wanted to add my husband to the deed on a home we purchased 2 years ago. We were advised we should get a new title insurance with both our names on it (rather than just mine) because it could cause issues when it is time to sell the house. I wouldn't object so much if the cost were a few hundred, but it's always in the thousands.

[asianthree]

I agree different BANK thats what we did

[Ohiogirl]

whether you're getting a new loan or re-financing. I agree, it feels like a rip-off, but I have never heard of any bank not requiring a new lender's title policy.

[jflynn1]

Shop around for the Refi and the Title policy . Ours went from $1,000.00 with Citizens to a $200.00 fee to renew the existing one. Depends on who you refi with.

Good Luck:)

[BnCinME]

Slightly off topic but if one is paying cash at closing (initial purchase) would they need Title Insurance?

[Dennis Ga]

Slightly off topic but if one is paying cash at closing (initial purchase) would they need Title Insurance?

Being a retired Real Estate Agent, paying Cash would be the number 1 reason to have Title Insurance as it potects you investment in the home. The Title Company would make sure if someone came and said "That this land was Stolen from their Grandfather," and they had the papers to prove it, you might lose your home but the Title Co would repay you for what spent. They also will defend the Title in court.

[784caroline]

If you are paying cash for your home, obviously there is no Bank (mortgage)involved so they do not require it. SO the question is do you as a cash buyer need it. First of all you must understand what Title insurance is for and how it pays off. If you research Title Insurance you will find that it is rarely paid out and even though all home purchases should have a title search and most if not all home transactions will state the title is being transferred free and clear, banks require it for their protecton. You will get different opinions here, but from my perspective if you are buyng directly from the Villages (the builder -NEW), it is extremely remote that a 3rd party would ever lay claim to your property....thus the need for title insurance would be minimal at best. If you are buying a resale property from a private owner the need for title insurance may become more of a requirement simpy because you are uncertain about the chain of ownership or mechanics liens etc that may have been placed on the property or possibly overlooked when a title search was done. Of course even in this situation, you could always go back and sue the seller of the property for not providing a clean and clear title, but you may never find them...

Ask yourself what kind of person are you and do the risks of not getting title insurance out weigh spending the $1000 (one time) or so to get it. If I had to put a risk ratio out there I would say its greater than 99:1 if you buy NEW from The Villages that something will NOT go wrong...so you are buying insurance for that <1%. The developer has built and sold more than 40,000 over 20 years and I have never heard of a "New" property title ever being questioned. Whereas buying resale, the % of something going wrong with the title is still very small but greater that buying a new property from the developer.

Your Choice!..there is not a right or wrong answer..whatever fits your comfort level or risk tolerance based on knowing the facts available.

[BnCinME]

Dennis and Caroline,

Thank you for your very informative responses! :thumbup:

[Fourpar]

....On the other hand, you might just ask yourself why lenders always insist on lender's title insurance. I would suggest that lenders are in the business of minimizing risk, and part of that equation is title insurance.
Owner's policies are not all that expensive, and every lawyer and banker that I have known has said they wouldn't buy any property without title insurance. And I wouldn't either. But hey, if you are paying cash it is your decision.....
That's my input as a 20+ year Florida Licensed Real Estate Broker and Instructor
Fourpar

[784caroline]

Im just curious as a 20 year licensed Florida Real Estate Broker can you give us an idea in a typical year (or span of years) how many claims were made against title insurance and total amount paid out...compared to total amount paid in.

Also in the RE business, is there any kick back among friends for referrals (from RE agents, brokers, title companies, lawyers, bankers etc) to purchase title insurance??


BTW: on houses that i bought as a resale from a "private" owner, I also got title insurance. In my eyes, a "new" purchase from the TV developer is not the same, which is what I believe the original poster is doing.