Atlanta Mortgage News

Title Insurance - Is It Worth the Extra Expense?

Likely, the biggest investment you will make is purchasing a home.  In the State of Georgia, determining the rights and interests to real property is the responsibility of the closing attorney who represents the lender. 

Let's start with the basics but HANG WITH ME!  This gets really interesting at the end, but I need to review the basics first.

What is title insurance?

Title is the paperwork for the ownership of property. Names on the title change as the property is sold.  The title company hired by the attorney searches the title (or ownership) history of the property. Through its research, the title company can almost always identify any title problems and clear up these problems before you close on the property; however, sometimes they miss something in the chain of title and that is where insurance comes in play. Sometimes the problems include:

· Defective title — "Defective title" covers any number of problems with the title to your home. It can even include a "contested title". Defects are rare, but they can be very difficult to get rid of, making the property inaccessible, unbuildable, or unsaleable. Any number of other complex problems define "Defective title." 

 ·  Contested title — This happens when someone who owned or even lived in the home before you claims to still have ownership. If this happens, the title insurance company will defend your title and the process will cost you nothing.

REQUIRED: Lender’s title insurance

The lender requires you get LENDER'S title insurance that protects the mortgage balance. 

OPTIONAL: Owner’s title insurance

The OWNER'S TITLE protects your interest in the property and it can vary in protection and cost. Here is the interesting part for the financially-minded:  Attorneys are legally obligated to quote STANDARD TITLE INSURANCE pricing unless they have permission within their forms to quote an ENHANCED TITLE INSURANCE. So I’m guessing you know what form most likely is include in their paperwork? :)

Here is the only significant between the policies:

STANDARD TITLE INSURANCE covers the equity between the purchase price and loan amount at the time of purchase. 

ENHANCED TITLE INSURANCE covers the house’s appreciation over a period of five(5) years up to 150% of face value.

The ENHANCED policy sounds really good until you read that sentence again.  Five(5) years, not 15 years or 30 years, or even 7 years (the average length of home ownership), is what they are covering extra with a significant jump in price. ASK and comparison check before you agree to your new policy. If the State requires STANDARD TITLE INSURANCE be quoted, that might be reason to pipe up with the questions and shop carefully.

**And here is my CMA -  I am not an attorney and this is not legal advice. If you want more information about title policies, search up title insurance companies or get quotes for both policies yourself. 

Posted by Elizabeth Washburn on March 14th, 2019 10:33 AM

Avoid the Scam
Wire Transfer Fraud: A New Twist

The security of my clients is a top priority.  There continues to be wire transfer fraud focused on mortgage transactions.  Now there is a new twist.

The Scam
Hackers often attempt to divert closing proceedings from title companies, attorneys, banks, and Realtors’ email with wiring instruction changes. The thieves, who compromise buyer and seller email accounts to intervene when a wire transfer is about to happen, are stealing thousands of dollars through these wire transfer scams.
There is a new twist in this – thieves will call the victim first as a cold call notifying them that there has been a change and to look out for the email with the new instructions.
Tips for Buyers and Sellers
Verify Wiring Instructions Changes
Customers receiving requests for changes to the wiring instructions should verify the change with all of the involved parties using telephone numbers previously provided. Under no circumstance should wiring instructions be changed based on a phone call alone.
Do Not to Accept Wiring Instruction Changes through email
Hackers target emails with wiring instructions. They use the information to send a modified email with updated directions for wiring money into their personal account. Never accept directions to modify a wire transfer from any email.
Watch for Name & Location Discrepancies
Be extremely wary of wires going to any account that is not in the name of the escrow company or attorney. Also, be suspicious of any account with a geographic location different than the seller—and never wire outside of the United States. There are possible explanations for different names and odd locations, but ALL red flags should be explored in detail with a phone call to the attorney's office with the number given to you verbally by me, your mortgage officer.  It took some time to earn that money.  Let's make sure it get to your new home.


Posted by Elizabeth Washburn on October 8th, 2018 5:42 PM

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