Can anyone explain why, in my case, the bank's cost for title insurance is $25.00 and the owner's cost is $1,005? isn't it the same coverage for the same home? I am mortgaging 80% so why isn't my cost only four times theirs?

I'm beginning to find that there are a lot of things in the way that real estate transactions are conducted with The Villages and Properties of The Villages that are "only in this area". More specifically, only in The Villages.

My sisters sell real estate up north and she is astounded with some of the things I tell her about this transaction.

And as far as I'm concerned, that shouldn't be my problem. If the Villages (or anyone for that matter, bought a piece of property that had an issue with the title, and then sold it to me, it should be their problem for not having done their due diligence. Why should be burden and cost be on me to insure that they did their job correctly? Why should I have to pay for their mistake?

See post #39-- Finally someone who has the expertise to speak on a complicated subject and give a frame of reference for a very important decision . IMO flying naked on the biggest purchase most families will ever make is not clear thinking. An old adage , but still valid "penny wise and pound foolish"

Real Estate Law differs from state to state. But if you have a mortgage, the lender really dictates whether you seek clear title, and they should because in essence they own your home and they didn't seek to buy it, you did and you are asking them to borrow their money.


I would NEVER ever pass on getting Title Insurance on a resale, anywhere, ever and from any other entity, even if I were paying cash. And I am not promoting anyone else doing what we did.

In reality, the Government will own your house---then someone else will live in your home if you don't pay your taxes. You really are only "leasing" your home from the Government.

But leasing your home from the Government can prove to be more profitable and a better arrangement than leasing from a landlord who leases the house from the Government.

Sorry, a bit off the subject. Dr. You have no choice in the matter of title insurance when you have a mortgage on the property. The lending institution will require it. Regardless, Title insurance isn't a scam---it's insurance---and to many not a bad idea and to others an unnecessary expense. To each his own. Good luck with your new "lease"!

Depends on the type of conveyence that they made to you. It may state that they are conveying only the title that they received when they acquired the property. Quite commom. Therefore many people feel compelled to do a title search amd additionally buy insurance.

Wishing , hoping, and believing are not cponcepts in Real Estate Law.

I think that you might have missed the point on two types of title insurance. One that covers the lender is mandatory. In my case, the fee is $25.00. The second type covers the homeowner. In my case it's $1005.

Technically, by law, the lender does not own the home. They have lent you the money to buy it and the buyer legally owns the home. The lender has the right to try to take possession of the property if the buyer defaults on the mortgage. But, they do not own the property. Foreclosure is a long legal process. You basically put up the home that you own as collateral.

How is it that so many of you missed the point about there being two types of title insurance? One that covers the lender and one that covers the owner. The one that covers the lender is mandatory and much less expensive than the one that covers the owner.

It's a scam on new homes, there's no past title on a vacant lot.
Existing homes seem to need it

I think you will find that the bank policy is $25 extra. If you don't get title insurance, the bank policy will be $1,005.

call any title insurance company in any county and ask for a quote for title insurance. ask them to explain to you about the simultaneous issue mortgagee policy. also ask them to explain how liens against an owner can attach to the property. call any real estate agent in the state of florida and ask them about the standard contract to sell real estate in florida. all contracts have a standard clause that states the seller provides a title insurance policy unless the contract states otherwise. i guess what confuses me is someone is willing to pay $200,000 for a home but not $1000 to guarantee good title. if you want to know what attaches to vacant land, go to the courthouse and ask if you can look at an abstract of title which shows all the documents prior to the land being developed. it is not a villages or mclin scam.

This is where I believe it gets complicated. The developer bought a large tract of land and then divided into a large number of lots. If there was a problem with the title of the large tract of land then presumably every lot has a problem. At that point, there is presumably a large legal problem because potentially thousands of lot would be involved. Presumably there would be a large class action law suite. I did not buy title insurance on my new house because I don't believe there is much chance of that happening. On a resale, there could be a number of issues with the title that someone missed (liens, problems with a will, divorce issues, etc.) and therefore title insurance makes more sense. Essentially, I am betting that the developer's purchase of the large tract of land that contains my new home was done cleanly because there was so much at stake. Perhaps I am naive - time will tell.

100 per cent incorrect statement . Read the quote from atty in post 39.

Is it public knowledge what percentage of your title premium goes toward paying claims? It appears kickbacks are the biggest title company expense. Politicians will not touch an industry that greatly benefits lawyers.

I refinanced my mortgage in January and Quicken Loan did purchase title insurance and I had to pay for it They said it is necessary when selling or refinancing.

What's confusing me is why the buyer should have to insure himself against bad title. If something goes wrong with the title down the road, shouldn't that be the responsibility of the seller?

If I buy a car from a dealer and find that there's something wrong with the title, would the dealer not have to give me another car?

If I put an air conditioning system in my house and the compressor blows after a week, is it not the responsibility of the seller or installer to replace it?

It maybe the law and it may be standard practice, but it is a scam. It should be up to the owner of anything to insure that what they are selling is what they say it is.

It could be the sellers' responsibility down the road..........but where is that seller when you need him/her. Out of state?? Out of country?? Heaven?? Since you are now working with a "dealer" like a car......it just becomes more difficult.

When you are REQUIRED to purchase title insurance, it is only because you are mortgaging the property. You are protecting the lender, which is only fair. If you own free and clear, you are NOT required to buy the title insurance. It would be a risky move to refuse it, but if you can withstand the loss of your money and home, it's your call as the buyer.

Why would the seller pay for the Title Insurance??? That should be a choice of the buyer if they want protection. I never heard of a seller paying.

Happens all the time when the buyer gets a mortgage. Often a seller will pay closing costs, and this is one of the higher cost items.

It depends. In some parts of the country, like New England, the only kind of deed you can get is a Quit Claim deed. What you are paying for when a buy a property in this case is for seller give up their right to claim that they own the property. In this case the buyer takes on all the risk of the title not being clear.

Since there is no way to know if there was some obscure land grant or a mistake in the recording of a deed the seller or buyer might want to purchase title insurance to cover their liability if something like that happens. But as always it depends on how the laws of the state treat the sale of property and what the seller an buyer agree to.

When we lived in Massachusetts there were a few instances where home some owners end up with ownership issues because 200 years before some Indian lands were not properly accounted for. I forget the ultimate outcome but I remember that those property owners were not able to sell their properties for years.

Actually, I think that it becomes less difficult with a big dealer like The Villages. do you think that they're not going to be around in 20-30 years?

It might be much more difficult if you bought from a private party. As you say, where are they? If you're dealing with a contractor that has only built a few homes and has only been business for a short while you might have a big problem.

Of course as my lawyer friend has stated, many things can be written into contracts and most of us don't understand half the papers we're signing at a closing. You could very well be signing a contract that absolves the seller of any liability should a title issue come up in the future.

Laws may be made by our representatives, but they are heavily influenced by lobby groups like insurance companies. I wouldn't be at all surprised if some of these laws were written by insurance company lobbies who then made huge contributions to campaigns.

And don't forget, up until a few years ago, lobbyist could legally take our government reps on various junkets designed to pedal their influence.

I don;t want to turn this into a political discussion, but just because something is a law doesn't always mean that it's right or in the best interest of the people.

In the final analysis, I'll probably go along and pay for the title insurance, knowing that I've been taken. There comes a point where you just have to protect yourself because people who are supposed to be protecting you don't.

My experience after a career in community banking , largely financing homes , is that advice from real estate agents is often erroneous or incomplete regarding contract and title issues. For the overwhelming majority of people a real estate attorney should be involved and their advice should be heeded. Title insurance is definitely not a scam. Without owners insurance, in case of a problem , that bank would be protected and the owner could possibly loose all equity and or the property.

Agree 100%. Real estate attorney. But I feel the people who are convinced title insurance is a scam will believe all attorneys just perpetuate the scam.

And yes there are some attorneys who are greedy.

Cristal: This thread is about title insurance. If you wish to discuss roundabouts, you can either start a thread with that topic or do a SEARCH on "roundabouts." There is a wealth of reading there. Good luck.

Agree. Didn't know you were talking about buying from TV. I thought your "seller" reference was more generic. Most homea are purchased from an individual rather than a company, so I went down a different path.

If it's a requirement by the seller to pay/buy title insurance , then the developer should have had to pay when selling the homes to the 1st buyer. How do the title companies not insist on them paying, but only on subsequent sales ? ...

Because TV does not use the standard FARBAR contract. It isn't a trquirement. Tbe standard contract calls fir the seller to provide title unless the contract provides otherwise. TV probably doesn'trovide because they have done their homework and know title is good. But errors do happen.

I think everyone is jumping over the details that may influence your decision. First, consider what the title insurance policy covers. Here is a good article from the American Land Title Association describing the products http://www.alta.org/about/TitleInsuranceOverview.pdf The second issue is for you to look closely at your deed to confirm that the seller is warranting the title and will defend you should that warrant not be true. Also, you will want to be certain the seller is economically sound and will be around when you need them in the future. If your satisfied as to these points you may not need the insurance. Remember the most typical benefit from title insurance is they pay the legal bills to establish your title, this is far more the benefit than people actually loosing title. If you are buying your property from the Villages, not a re-sale, and you clearly within the Villages planned subdivision , you may not need it. It really depends on your tolerance for risk. Good Luck.

I believe that the deed from The Villages is a Warranty Deed not a Special Warranty Deed. If so they are only conveying the title that they were deeded when they acquired the property. If I am correct any previous defects in title are still in existence.

Would you pay $1000 to insure your home against fire forever.

About $1000+- will insure that you have clear title (or defend attacks) for the entirety of your ownership

Reply to Title policy scam.
 

I wish I had an answer other than there are so many residents involved that I have to wonder why every individual continues to pay for this high priced "policy" when there is more than one forum for all involved to attempt to stop it. I also wonder if residents have tried in the past. Years ago I had the option to skip this non-insurance. Today you cannot just have your bank do the closing. They insist on selling you the policy instead. Greed.

I have purchased 2 houses this year and am selling 1 at the moment. I am faced with paying again for a policy to sell a house I titled 6 months ago, albeit at a reduced fee. My question has been has ANYONE ever heard of a homeowner collecting on a policy when there was an error on the title? Never. I don't believe I'd spend the anguish to try. So besides the fact a title here almost has to be clear (unless you installed something partially on your neighbor's property)it's misleading to market as an insurance policy. dB

We wouldn't buy a house without title insurance. There were many problems with people's property in MI caused by history of prior ownerships--farmers, tribes, etc.

In NJ we were the ones with the problem due to sketchy past ownership. Title insurance took care of it in that if a previous owner ever came back at the property, we were covered.

Required "title insurance"
 

Some confusion here. these are 2 different insurances. Lenders have always required mortgage insurance. Title non insurance, as I call it, is separate.

In regard to new homes in The Villages purchased from the developer, I'm not sure the word scam applies, but some one is making a lot of easy money from an essentially captive audience. All the homes on my street were once part of the same parcel and this parcel was purchased by the developer whom I'm sure ascertained he had clear title to the property before developing it. So do each of the 60 homes in my courtyard villa neighborhood need a separate thousand dollar title insurance policy? And since the developer surveyed the lots before building the homes do we each have to pay for an additional survey?
Just asking?
In addition most of us purchased these homes via The Villages realtor, mortgaged with The Villages mortgage company, and settled via The Villages title company. Lots of bucks to be made.

Required "title insurance"
 

Some confusion here. these are 2 different insurances. Lenders have always required mortgage insurance. Title non insurance, as I call it, is separate.

Wish I would have thunk it up first.

I find almost no one thinks through the cost of insurance and simply buys no matter what they might get for it. On the 1 hand we have to have medical insurance on the chance you might suddenly be faced with astronomical charges. At the other extreme there is appliance insurance. Can no one imagine that these companies have it figured out how much to charge for a policy and how much they will pay out. How do you think they make money? They charge you more upfront than they have needed to pay out. We have been trying for weeks to get a clothes dryer fixed through insurance purchased by the former homeowner ( I have never bought insurance on any gadget). Sears will only use rebuilt parts. They don't necessarily work either. A week between each ordered rebuilt part has us at 3 weeks in the laundromat now.
Title Insurance: A title search which we are charged separately for makes some sense. So called title insurance no person can ever collect on.

I have an active California law license and have handled numerous cases where a title insurance policy was the only thing that stood between the homeowner and bankruptcy; for an example of one of my cases where title insurance was crucial to my clients (Mrs. & Mrs. Hays) search Google for "Hays vs. Vanek".

If your neighbor claims your house violates the setback law and is 4 inches too close to his or her house, you will need your title insurance company to step in and defend you - and to pay legal bills that could run a hundred thousand dollars or more, not to mention paying the cost of tearing off the roof and the wall of your house to move your wall further in, and to compensate you for your home's lost value, if you lose; remember that the time allowed by law for you to sue the developer over this will likely have expired.

If a utility decides it wants to run an enormous cable under your home, you will need your title insurance company to defend your claim to your property and compensate you for the value of your home if you lose. If Sumter County, Lake County, or Marion County claims it has the right to widen the street behind, next to, or in front of your house and take most of your yard in the process, you will need your title insurance company to defend you and compensate you for your home's lost value if you lose.

'Not to mention that if you decide to refinance your existing mortgage, or take out a new mortgage, or get a reverse mortage, you will be out of luck without title insurance - no lender will touch your home loan application. And when you try to resell your house, intelligent buyers will want a steep discount since a title insurance policy guarantees that you have good title to the home you are selling, and they will have trouble getting a title insurance policy on a house that doesn't currently have one. Most title insurance companies will only issue policies at the time you buy the property - you will find it difficult to impossible to get one later.

Personally, I would never, ever go without title insurance, and I'd advise clients to avoid buying a house where the owner was so reckless or so poorly advised that they went without their own title insurance policy. It's a one-time purchase that could end up keeping you out of poverty some day. - Suuzen Ty Anderson