BluefoxToday blog : Foreclosure Scandal Demonstrates The Value of Owner’s Title Insurance

Foreclosure Scandal Demonstrates The Value of Owner’s Title Insurance

Many homebuyers, eager to reduce their expenses during the purchase process, question the need for purchasing owner’s title insurance. After all, the bank’s attorney has already researched the title for the bank, how much risk could there be? However, the recent allegations that the country’s major mortgage lenders improperly processed foreclosure documents, and in some cases, actually forged signatures or made false statements, have demonstrated the value of title insurance.


The foreclosure issue is just one of many potential scenarios which consumers and attorneys cannot identify in advance, and the problem should serve as an incentive for homebuyers to ALWAYS purchase owner’s title insurance. The few hundred dollars spent may not only save thousands in future legal costs, but just might save the buyer’s home.


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Comment balloon 13 commentsJohn Mulkey • October 11 2010 10:10AM



When I hear that fraud will be an exception for title insurance coverage liability, it makes me want to avoid foreclosed homes until this blows over.

Posted by Mike Jaquish, 919-880-2769 Cary, NC, Real Estate (Realty Arts) almost 8 years ago

John, I've never bought a home without title insurance. Even when I was 19 buying my first home and watching every penny the money saved at the closing could not replace my peace of mind.

Posted by Cynthia Bartch, Redesigned Spaces; All Round Nice Gal (Home Stager/Property Stylist & more! Granville, Ohio) almost 8 years ago

Mike - Many will avoid foreclosures and some title companies are refusing to insure them.

Cynthia - I've always purchased title insurance; it's very inexpensive protection.

Posted by John Mulkey, Housing Guru ( almost 8 years ago

Will the Title companies be burdened with legal costs due to the impending lawsuits?

Posted by Jon Budish (Resident Realty) almost 8 years ago

Jon - It has been projected by some that title companies could be ruined by this. I'm not yet certain it will get that dire, but it could if the lawyers try to turn it into a "cash cow." (I can see the nighttime TV ads now: "Lost your home to foreclosure?  You may be able to receive compensation.  Call the offices of Dewey, Cheatham, and Howe)

Posted by John Mulkey, Housing Guru ( almost 8 years ago

John  Is it possible to issue just a mortgagee's title policy without an owners policy? I have not ever seen it done.    Here the motgagee's policy piggybacks off of the owners policy and is a fraction of the cost of the owners.. confused.

Posted by Trey Thurmond, College Station , Texas Homes (BCR Realtors) almost 8 years ago

Trey - In GA we can "piggyback," but it's not a requirement.  The purchaser must agree to purchase the policy.

Posted by John Mulkey, Housing Guru ( almost 8 years ago

But they don't forget the REQUIREMENT that title insurance be purchased to protect the bank!

Posted by Jay Markanich, Home Inspector - servicing all Northern Virginia (Jay Markanich Real Estate Inspections, LLC) almost 8 years ago

Jay - The bank will ALWAYS be protected; that's how they get to have all the money.  (And the sad part is: if they screw up and lose, we have to make them whole)

Posted by John Mulkey, Housing Guru ( almost 8 years ago

Hi John, Title Insurance is key. I am with Cynthia, would never do without...

Posted by Barbara Heil-Sonneck, Home Staging Atlanta (Design2Sell) almost 8 years ago

Barbara - That's the best choice.

Posted by John Mulkey, Housing Guru ( almost 8 years ago


Now more than ever it is mandatory to have owner's title insurance. Don't make a purchase without it.

Posted by Esko Kiuru over 7 years ago

Esko - I agree.

Posted by John Mulkey, Housing Guru ( over 7 years ago