Rolling the Dice...with Title Insurance

By Monika McGillicuddy

Are you rolling the dice...taking a chance with Title Insurance?

Twenty Two years in the business and I still have a hard time making buyers understand the importance of Title Insurance…most think it’s a big waste of money. I know that someone makes money from selling title insurance…but so what. How does that compare to having piece of mind???  I’ve heard horror stories from far away…but local New Hampshire stuff? Not  very often.  

So if you’re wondering “Do I really need Title Insurance?”  or  wondering how to make your buyer understand the importance of Title Insurance…take some time and read the following written by Karen F. Kelley, President of Broker’s Title & Closing, LLC Bedford N.H.  Reprinted in part below with her blessing.

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Let me arm you with some examples of how title insurance saved the day.  These are not horror stories from California or Texas. These title claims occurred right here at Broker’s Title within the last 6 months.

A Milford N.H. property closed with Broker’s Title paying off the 2 seller mortgages. The payoff statement for the second mortgage to Champion came from the “work-out department”. Closing went smoothly; deed and mortgage were recorded; everyone was paid; buyers moved in.  Ten days later, the payoff check to Champion was returned with a form letter indicating that Champion was not accepting the check “due to foreclosure”.  WHAT??!! Many calls later to Champion, their attorneys, our attorneys, the title insurance attorneys revealed that there was indeed a foreclosure on the property a couple of weeks prior to the closing with a successful bidder who was soon to receive a deed to the property.  Because the deed was not yet recorded, there was no way for Broker’s Title to know about the foreclosure.  The title insurance attorneys immediately took control and persuaded Champion to unravel the foreclosure and accept the payoff.  The buyers, who had in fact purchased an owner’s title insurance policy, never knew that their title was in such jeopardy. 

The title to a Kingston N.H. property we recently closed was littered with private mortgages, tax liens, IRS liens and a ten-year messy divorce with 8 Court files to be reviewed.  I worked for weeks to clear title and we finally closed after I was satisfied that all liens were paid and that the seller did in fact have “good title”.  Six weeks later I received a call from an attorney representing an attaching party, asking why we had not paid off the $45,000 attachment at closing!  A careful re-review of the title file showed no mention of this attachment by our very experienced and thorough title examiner.  It was later determined that she made a decision that the attachment had no bearing and chose not to mention it.  Title insurance attorneys are now negotiating the release of this attachment with no cost to the buyers.

Not all claims are for such large sums, but they do represent monies from the buyers’ pockets if they do not have an owner’s policy.  George called me 6 months after he closed on his condex to tell me that a surveyor had knocked on his door to notify him that his above-ground pool and shed were too close to the lot line and would have to be moved.  This is not something Broker’s would have uncovered so I sent him away several times because I really didn’t know what I could do for him.  When he called yet again, in frustration I gave him the telephone number for the title insurer, even though I did not feel his policy would cover such an event.  I was wrong.  Title insurance paid him over $3,000 to cover the cost of moving the shed and the pool, and George was a happy man!

So the next time you are asked your opinion of title insurance, remember these case studies.

                                                         Broker’s Title & Closing, LLC

e-mail: kkelley@brokerstitlenh.com

www.brokerstitlenh.com