In the past two articles we discussed the importance of owner’s title insurance. Today we look at an example of how title insurance could protect your client from the ever growing issue of fraud and forgery.
Fraud and forgery are examples of hidden title hazards that can remain undetected until after a closing despite the most careful precautions. Although emphasizing risk elimination, an owner’s policy protects you financially through negotiation by the insurer with third-parties, payment for defending against an attack on the title as insured, and payment of valid claims.
Innocent buyers purchased a home site through a real estate company, accepting a notarized deed from the seller. After the purchase, another couple—the true owners of the property who lived in another city—initiated legal action to prove they actually owned the property. Because the innocent buyer purchased an owner’s policy for a one-time fee at closing, the title company provided a money settlement to protect against financial loss.
As it turned out, a forger spent time in advance at the local courthouse, searching the public records to locate property with out-of-town owners who had been in possession for an extended period of time. The individual involved then forged and recorded a deed to a fictitious person and assumed the identity of that person before listing the property for sale to an innocent purchaser, handling most contacts through an answering service. Also, the identity of the notary appearing on deeds was fictitious as well.
Homeowners without this coverage would have lost their home.
Meet Our New Greenville Partner: Chris Brown is a Greenville native. He graduated from Furman University and Mercer University School of Law. Chris has extensive experience in real estate and community association law. In addition to real estate, Chris’ practice concentrates on drafting wills, assisting clients with conservatorships and guardianships, probate law and elder law. Chris dedicates countless hours to the community, volunteering at the LifeWise Senior Program through Bon Secours St. Francis Health System, the Alzheimer’s Association – SC Chapter, the Ray Hopkins Senior Center, the Greenville Area Parkinson’s Society, The Osher Lifelong Learning Institute (OLLI) at Furman, Senior Action, and the Mauldin Chamber of Commerce.
Photo by Got Credit 