Title Insurance

[communique]

There have been recent media reports on houses being sold fraudulently with the unsuspecting vendor eventually left completely out of pocket and the only recourse is to try and find the felons. (I understand the titles office is not held responsible?) What do readers of the forum think of Title Insurance to protect homeowners?

 

[doctorj]

In most, if not all, US States, it is compulsory to take out title insurance when buying a house.

Is it the answer? Probably not... It's nice to have as a fall back, but it's no substitute for proper DD. If you have title issues and you have title insurance, they will pay for litigation and so forth and then, if that doesn't work out they'll pay you. It's a long painful process.

Out of interest, who's selling title insurance in Australia? It's huge in the US but almost non-existent in Europe. A few of the larger Title Insurers are starting to try in Central Europe and the Balkans (restitution is a HUGE issue in Albania for example), but so far without any traction.

 

[communique]

Two companies specialise it in Australia that I know of but I don’t understand why the big players aren’t doing it i.e. Suncorp etc.

 

[doctorj]

Two companies specialise it in Australia that I know of but I don’t understand why the big players aren’t doing it i.e. Suncorp etc.

It works in the US because everyone uses it. In Australia there'd be a massive problem pricing it because only those facing title issues would bother purchasing it (antiselection).

 

[Smurf1976]

If the house is mortgaged at the time of purchase, would the bank not verify title before issuing the mortgage? It is in their interest to do so surely?