48.8 Million Homeowners at Risk, ALTA Warns; An Estimated 40 Percent of U.S. Homeowners Don't Have an Owner's Policy of Title Insurance.WASHINGTON -- The American Land Title Association The American Land Title Association or ALTA, is a national trade association representing the interests of the abstract of title and title insurance industries. In addition to active members engaged in the title industry, associate members cover a wide range of businesses (ALTA), the national trade association for the title insurance industry, warns that millions of U.S. homeowners may not be protected in the event of a challenge to the title to their homes and could face large legal fees and even risk losing their home. According to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. ALTA, while most homeowners have a Title Insurance Loan Policy protecting their lender, an estimated 40 percent of U.S. homeowners, representing 48.8 million(a) homes, do not have an Owner's Policy of Title Insurance to protect their investment. "It is standard procedure in a home purchase or refinance Refinance 1. When a business or person revises their payment schedule for repaying debt. 2. Replacing an older loan with a new loan offering better terms. Notes: When a business refinances they typically extend the maturity date. transaction for the lender to require a Loan Policy to cover the mortgage loan," said James Maher, executive vice president of ALTA. "An Owner's Policy, which is optional in many states, covers the homeowner's investment, such as their down payment and equity up to the coverage limit. Unfortunately, many homeowners either don't know Don't know (DK, DKed) "Don't know the trade." A Street expression used whenever one party lacks knowledge of a trade or receives conflicting instructions from the other party. about it or don't think they need it, leaving them vulnerable." How Title Insurance Works When a buyer purchases a home, a title search is conducted to determine ownership of the property and whether any encumbrances exist that would prevent the free and clear transfer of title to the new owner. The title search reviews all recorded documents to uncover any judgments, liens, taxes owed, street easements EASEMENTS, estates. An easement is defined to be a liberty privilege or advantage, which one man may have in the lands of another, without profit; it may arise by deed or prescription. Vide 1 Serg. & Rawle 298; 5 Barn. & Cr. 221; 3 Barn. & Cr. 339; 3 Bing. R. 118; 3 McCord, R. , special taxes and levies, and other matters that could impact the status of the title. During a refinance transaction, a title search is still required by the new or existing lender to uncover any problems that may have arisen since the last policy was issued. However, the original Owner's Policy is in effect for as long as the owner (or their heirs) have an interest in the property. An ALTA survey revealed that title problems arise in one out of every four real estate transactions. According to Maher, there are many unforeseen problems that can occur to threaten the title to a property, even if a proper title search was conducted. Examples include, but are not limited to, mistakes in the public record, previously undisclosed heirs claming to own the property, and forged deeds. For homeowners who purchase an Owner's Policy for a one-time fee at closing, the title company will negotiate these problems with third-parties and pay the claims and legal fees involved in defending the title. Following are three examples of situations that occurred, demonstrating the importance of having an Owner's Policy. Example One: A Case of Fraud and Forgery forgery, in art forgery, in art, the false claim to authenticity for a work of art. The Nature of Forgery Because the provenance of works of art is seldom clear and because their origin is often judged by means of subtle factors, art A fraudulent The description of a willful act commenced with the Specific Intent to deceive or cheat, in order to cause some financial detriment to another and to engender personal financial gain. realty realty n. a short form of "real estate." (See: real estate) REALTY. An abstract of real, as distinguished from personalty. Realty relates to lands and tenements, rents or other hereditaments. Vide Real Property. company searched public records to locate property with out-of-town owners, and forged and recorded a deed deed, in law, written document that is signed and delivered by which one person conveys land or other realty (see property) to another. A deed may assure the extent of the conveying party's ownership or, if the party is uncertain of the precise extent, he issues a to a fictitious Based upon a fabrication or pretense. A fictitious name is an assumed name that differs from an individual's actual name. A fictitious action is a lawsuit brought not for the adjudication of an actual controversy between the parties but merely for the purpose of person. They then sold the property to an unsuspecting buyer, providing a notarized deed, also fictitious. When the real owners discovered what had happened, they immediately initiated legal action against the new owners claiming title to the same property. The Owner's Policy protected the buyer by paying all legal expenses and the claim by the out-of-state owners. Example Two: A Case of Conflicting Wills After receiving a house from his late mother, a man sold the property to a new owner. After the sale, the brother of the seller came forward to claim an ownership interest in the property, and was seeking a substantial amount of money as his share. Since the new owner had obtained an Owner's Policy, the title company paid the claim, along with an additional amount in legal fees incurred during the defense, allowing the new owner to remain in the house. Example Three: A Case of Missing Heirs Missing heirs are persons related to a decedent (dead person), or testator of a will, but whose residence, domicile, Post office, or other address is not known. A missing heir may be an orphan or other person under a Disability, who may need a guardian or custodian of A couple purchased a home from a widow whose husband died without leaving a will. Soon after the sale, the son of the late owner by a former marriage came forward to claim his share of the home, which resulted in an expensive problem for the couple purchasing the property. An Owner's Policy protected the couple by paying the claim from the missing heir and they were able to keep the house. "In each of these examples, the homeowners could have lost their homes if they hadn't purchased an Owner's Policy," said Maher. "Most people think they are covered when they see title insurance on their closing statements, not realizing they may only have a Loan Policy." For more information on title insurance, visit the Consumer Information page of the ALTA Web site at: http://www.alta.org. About ALTA The American Land Title Association represents title insurance companies and their agents nationwide on a variety of industry and legislative issues. Members of the Association search and insure land titles to protect real estate investors A real estate investor is someone who actively or passively invests in real estate. An active investor may buy a property, make repairs and/or improvements to the property, and sell it later for a profit. including homebuyers and mortgage lenders. (a) According to the U.S. Census Bureau's report on Residential Vacancies and Homeownership released on July 29, 2004, for the second quarter of 2004, there are approximately 122 million homes owned in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. . |
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