YOU ASK:

What is mortgage title insurance?

WE ANSWER:

Also called lender's title insurance, this is a title insurance that is issued to protect the bank or lending institution that issued the mortgage. Essentially, it protects the collateral used for the loan being issued - which in most cases would be a house or property for which the mortgage loan is issued.

In the event that someone contests your title on the property, this coverage will pay for the lawyer's fees. Also when the case loses in favor of the one who filed the claim on your property, then it will also pay for the remaining balance of the mortgage.

Some circumstances that the mortgage title insurance will cover include:

  • The contract that involves the mortgage is rendered invalid or unenforceable
  • Liens and encumbrances that existed on the property before the date the insurance policy is made effective
  • A defect in the title that renders the property unmarketable or forces its value to decrease rapidly
  • The absence of right of access to the land
  • Mistakes in the recording of legal documents - such as a deed

If you want a more expanded coverage for mortgage title insurance, this may provide coverage against the following:

  • Violations in the building permit
  • Subdivision Map
  • Violations in the Zoning Law
  • Inaccurate street address or legal definition
  • The exercise of expanding existing access
  • Usury Law
  • Improvements that were shown in the policy that are missing in actuality
  • ALTA Form 9, Form 6 and Form 6-2 Endorsements
  • Surveys
  • Restrictions that are legally enforceable
  • Encroachment (both by the owner and by the parties surrounding that property)
  • Land and structure damage due to water or mineral extraction
  • Loss of priority
  • Environmental liens
  • Forgeries after the effective date of the policy
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