How to Avoid a Dream Home Nightmare!

Hush scared business people coughing big pop-eyed fashion concepPicture yourself in your dream home you have purchased after years of saving. Could life be any better? Look, there’s Joe the mailman parking his mail truck right in front of your house. You open your front door; he has a registered letter for you. Mmmm, wonder what this is? You bid Joe goodbye and open your registered letter only to find that a local bank is giving you noticed that they are foreclosing on your dream house.

Horror fills you, what in the world could they mean? You’ve been making your regular monthly mortgage payments; you’re even ahead a month. This can’t be right!

Turns out, the builder who built the home for the couple you purchased it from had several mortgages in which your property, among others, was the collateral. It appears that the prior title company did not pay much attention or wasn’t diligent enough in obtaining mortgage releases on the property. They knew your builder, he was a good guy, and the title company had worked with him before. It had gone unnoticed while the builder was making the payments, but now it seems that the builder has fallen behind in payments and the bank is foreclosing.

You panic, you call an attorney. The attorney, not being able to make you any promises as to what will happen also requires a rather large retainer, which you don’t have after all the projects around the house. What do you do? Who do you turn to?

Now if you had purchased an Owners Title Insurance Policy at the time of closing instead of opting to spend the few bucks on new living room blinds, there’s no panic, no sweaty palms, no heat beating like a bass drum, no wondering where you’ll find the money for a retainer. It’s a matter of a phone call to the title insurance underwriter who’s going to assure you to keep calm and forward them the information you received. They’ll handle it.

If you are financing a home, almost all lenders will require a lender’s title insurance policy which protects the lender in the event there is a title issue. An Owner’s Policy is optional. You are not required to purchase an Owner’s Policy; you are given a choice. Remember, a lender’s policy only protects the lender. It won’t protect you as an owner, so when purchasing a home, you not only want to be sure you picked a great title company, you want to be sure that when you finally decide to move forward and buy your dream home, you also purchase a title insurance Owner’s Policy to protect one of your biggest investments.

You want to know you are working with a title company who is approved by A+ underwriters who are going to be there if you need them. Go ahead and clip coupons, skip the daily gourmet coffee and buy generic to save money, but never skip the Owner’s Policy. It’s a one-time premium that one day you may be very well happy you paid.

Article provided by Cynthia Bankosh, Title Agent, Settlement Engine, Inc.