Understanding Title

What is Title Insurance?

Title insurance is insurance against loss from defects in title to real property and from the invalidity or unenforceability of mortgage liens. It will cover you if a problem regarding title defects or legal ownership arises that was not discovered during the title search. Title insurance, and the search and examination process that takes place before a policy is issued, assures the homebuyer that the title to their property is clear, and that they are protected from any future challenges to their title. It protects the buyer’s home investment and assures the buyer that the property is really his or hers.

There are two types of title insurance:

1. Owners Policy
   An owner’s policy insures the purchaser that the title to the property is free from defects, except those which are listed as exceptions in the policy. It is normally issued in the amount equal to the real estate purchase price and remains in effect for as long as the owner or their heirs retains an interest in the property.
2. Loan/Mortgage/Lender Policy
   The lender’s policy is separate from the owner’s policy. It assures the validity and enforceability of the lien of the lender’s mortgage or deed of trust and serves as protection for the lender’s security interest in the property. A Loan Policy is issued to the lender in the amount of the loan, and liability decreases as the mortgage debt is reduced.

The difference between a Loan Policy and an Owner’s Policy is the length that each policy stays in effect. A Loan Policy expires when the loan is paid in full and an owner’s policy protects the owner’s in the property for as long as they or their heirs have an interest in the property.

How does Title Insurance Work?

A typical title examination includes the search of numerous public documents, including tax records, court judgments, prior deeds and encumbrances, and federal and state records. The title agent is looking for items like prior mortgages, judgments, liens, street and sewer assessments, special taxes and levies, and numerous other matters that could affect the status and marketability of the title. The customer will receive a title commitment when title insurance is ordered which is the results of the title search, so that any issues shown can be corrected prior to the purchase.

Your title insurance is assurance to you that the land ownership rights that come with your real estate investment remain yours for as long as you have an interest in your property. If you encounter a defect with your title, your title insurance policy is there to protect your interest.

Why Title Insurance?

There are only a few things in life more important than protecting your home. The following matters are examples of why you need a Title insurance policy issued by Kansas City Title. Remember that the best title examination or search cannot protect your equity and home from matters not appearing in the public records. However, an Owners policy, subject to its terms, issued by Kansas City Title policy can protect you from:

• Documents executed under false, revoked or expired power of attorney
• False impersonation of the true landowner
• Undisclosed heirs
• Improperly recorded legal documents
• Failure to include necessary parties to certain judicial proceedings
• Defective acknowledgements due to improper or expired notarization
• Gaps in the chain of title
• Mistakes and omissions resulting in improper abstracting or examination of the title
• Forged deeds, mortgages, wills, releases of mortgages and other instruments
• Deeds by minors
• Conveyances by an heir, devisee or survivor of a joint estate who attempts to attain title by illegal means
• Inadequate legal descriptions
• Duress in execution of wills, deeds and instruments conveying or establishing title
• Deeds and wills by persons lacking legal capacity
• Administration of estates and probate of wills of missing persons who are presumed deceased
• Issues of rightful possession of the land
• Issues concerning the rightful conveyances by corporate entities
• Issues involving improper marital status
• Improper modification of documents
• Misinterpretation of wills and ancillary instruments
• Forfeitures of real property due to criminal acts