Archive for 'title insurance'

This article forwarded from Andrew Teutsch

Before reading this article, it sure would be awesome if Bed Bugs coverage could be included in Renter Insurance policies. A dream come true for apartment owners.

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As Bedbugs Multiply, New Insurance Plans Crop Up

Bedbugs are crawling the sheets in hotels, apartment buildings and college dormitories in surging numbers, which has spawned a new enterprise for insurance companies.

The tiny, reddish bugs, ranging to about 7 millimeters, or the size of Lincoln’s head on a penny, hide in dark places like vampires during the day and suck human blood at night. Unlike those other blood-thirsty parasites, head lice, bedbugs are extremely hard to wipe out once they infest, and the cost can be very high.

Infestations of any kind — bugs, rats or cockroaches —typically are excluded from commercial property insurance policies. The cost of eradicating pests was a maintenance expense, meaning it was not covered by insurance, up until recently.

Insurers, like most of us, didn’t want to get near the bugs.

But increasing pressure from lawmakers to require coverage, along with high demand from hoteliers and property owners to protect themselves from financial loss during an infestation, has created a new market.

Last month, bedbug insurance coverage was offered for the first time by two national brokerage firms, Aon Risk Solutions of Chicago and New York-based Willis North America; and also NSM Insurance Group of Conshohocken, Pa., an insurer.

“You’ve got legislators in the state of New York Assembly who are trying to make this mandatory that insurance companies do this,” said John Lafakis, senior vice president at Willis North America and program manager for the bed bug recovery insurance. “So we figured, ‘You know what, we’re going to beat everyone to the punch.'”

The brokerage firms are leaping into an area that has exploded after years when bedbugs were rarely reported, seemingly a forgotten annoyance from another era.

“Ten years ago it was considered a minor pest issue,” said Greg Gatti, a director at Aon Risk Solutions.

Bedbugs have grabbed headlines as more and more people report the telltale red welts after staying in hotels and living in apartment buildings.

Hotels could spend an average $600 to $800 per room to eradicate bedbugs, according to experts in Connecticut. That says nothing of lost income if an infestation becomes public knowledge — on websites such as bedbugregistry.com, or in the media.

Nutmeg State Plagued

The state office that fields questions from people asking about bedbugs, the Connecticut Agricultural Experiment Station in New Haven, had only two inquiries in 1996. Reports started coming in more regularly in 2003 in all major cities across the state, said Gale E. Ridge, an entomologist who specializes in bedbugs at the experiment station.

Ridge is also chairman of the Connecticut Coalition Against Bed Bugs, which brings together bug researchers, pest control services and other interested parties. She recorded more than 900 reports from people who suspected they had bedbugs in the fiscal year that ended June 30, 2010, and the numbers are double or triple that for the year that ended June 2011.

The insects are now in every corner of the state. “We have a very active population here,” Ridge said.

Bedbugs aren’t known to spread disease, but they can be an annoyance because of itchy welts from their bites and the loss of sleep they cause, according to the federal Centers for Disease Control and Prevention.

The Connecticut trend mirrors what is happening across the U.S. First, bedbug reports were coming out of larger urban areas. Now, they are more widespread, affecting every town in the state, Ridge said.

Occasionally, a person will mistake Eastern bat bugs (Cimex adjunctus) with bedbugs (Cimex lectularius), which are similar in the way they look and behave. Bat bugs typically signal that bats are living in the eaves or attic.

What’s the difference?

Bedbugs are small, flat parasites, retreating by day to hiding places in bed frames, floorboard cracks and other dark corners.

by MATTHEW STURDEVANT, The Hartford Courant

NEVER Buy Real Estate Using A Quit Claim Deed.

ALWAYS Buy Real Estate via a Real Professional Closing At A Real Estate Attorney’s Office or Title Company. This article explains the many pitfalls of using a "Quit Claim Deed" (not Quick Claim)

Mike Butler

 
Title insurance protects owners of real estate, and mortgage lenders, against any possible losses if the title to real estate is determined to be defective in some manner. If any type of encumbrance, lien or other defect to the title is discovered following the transfer of ownership or the placement of a mortgage lien, the owner and the lender are protected against losses associated with correcting the problem. If you desire to transfer or obtain an interest in real estate through a quitclaim deed, then you need to know whether title insurance is available.
 
 
Quit Claim Deed Function
 
The function of a quitclaim deed is to transfer the interest a purported owner of real estate may have in that property. Unlike a warranty deed, a quitclaim deed does not carry with it a guarantee that the title to the real estate is free and clear of any liens or encumbrances. The person conveying an interest in real estate with a quitclaim deed essentially is doing so in an "as is" condition.
 
 
Significance
 
Because no warranty or guarantee is made regarding the actual state of the title when a quitclaim deed is used, title insurance cannot be obtained. Title insurance is available when a warranty deed is used, because of the clear title guarantee associated with that type of instrument.
 
A primary reason why title insurance is not available with a quitclaim deed is because no title search is undertaken before such a deed is signed and filed. A title search is a thorough investigation of the state of the existing title to real estate to determine what liens or encumbrances, if any, exist.
 
 
Purpose
 
The purpose of title insurance is to protect a person or other legal entity against losses that arise when a lien or encumbrance is discovered after a transfer of title occurs. In the absence of a title search associated with a quitclaim deed, no title insurance company will extend this type of protection to the property owner.
 
 
Warning
 
A person receiving a purported real estate interest via a quitclaim deed may receive no legal right to the property whatsoever. If the person seeking to transfer real estate with a quitclaim deed has no legal interest, nothing legally is conveyed. In the absence of title insurance–which is not available for a quitclaim deed–the person receiving the quitclaim deed has no legal recourse because the deed itself states that only the interest of the grantor, if any interest exists, is conveyed.
 
 
by Mike Broemmel, Demand Media
For more: http://bit.ly/cYZmaq

 

by RICH VETSTEIN

 

“Are title insurance companies still insuring foreclosure properties?”– James In Cambridge
 
Answer: Yes, they are.
 
Initially, the press reported that some major title insurers had temporarily stopped insuring foreclosure titles from JP Morgan Chase, Ally Financial, and Bank of America. However, my understanding is that all title insurers have resumed insuring all foreclosure properties in the wake of several major agreements between national title insurance companies and lenders. These warranty and indemnification agreements would essentially shift the risk of loss from irregular/defective foreclosures back onto the foreclosing lenders.
 
From the conveyancing side, I can definitely tell you that title insurers have advised their attorney agents to go through foreclosure titles with a fine tooth comb and to be especially diligent in examining and certifying foreclosure titles. Buyers of foreclosure properties should be prepared for delays in getting their transactions closed.
 
“How is robo-signing different from the Ibanez case situation”?–Scott
 
Answer:  ”Robo-signing” and the Massachusetts Ibanez foreclosure case are two different situations, but the root of the problem — the complexity of the securitized mortgage industry and the sheer volume of foreclosure paperwork to be processed — remains a contributing cause of both problems.
 
“Robo-signing,” as one of the leading foreclosure defense attorneys has claimed to the Huffington Post, refers to how financial institutions and their mortgage servicing departments hired hair stylists, Walmart floor workers and people who had worked on assembly lines and installed them in “foreclosure expert” jobs with no formal training to sign sworn documents submitted to courts. According to depositions released in Florida and the Post, many of those workers testified that they barely knew what a mortgage was. Some couldn’t define the word “affidavit.” Others didn’t know what a complaint was, or even what was meant by personal property. Most troubling, several said they knew they were lying when they signed the foreclosure affidavits, and that they agreed with the defense lawyers’ accusations about document fraud.
 
This is obviously a major problem in states such as Florida which require a judge’s approval of a foreclosure based on sworn documents. However, Massachusetts is not such a state. Other than verifying the borrower is not in the military, Massachusetts state law doesn’t require any sworn verification that the foreclosure is kosher (if you will). That may change after lawmakers and the Attorney General’s office react this foreclosure mess. In fact, the AG announced this week she is investigating on of the largest “foreclosure mills” in the state for alleged non-compliance with the new tenant foreclosure law.
 
The Ibanez problem occurs when mortgage loan documentation recorded with the Registry of Deeds lagged far behind the actual ownership of the loan, due to complex mortgage securitization agreements and sloppy follow up. Land Court Judge Keith Long’s ruling effectively invalidated thousands of foreclosures which suffered from this newly recognized “defect.” The Ibanez situation is not a product of fraud, like robo-signing, in my opinion. In fact, the practice of recording mortgage assignments “late” was long accepted by the title examination community prior to the Ibanez ruling. So it caught a lot of folks off-guard.Getting title insurance on an Ibanez-afflicted property is near impossible these days, and the robo-signing controversy certainly doesn’t help alleviate  the risk tolerance of anxious title insurance underwriters.
 
To be sure, both Ibanez and the robo-signing controversy have reverberated through the real estate community, and have impacted foreclosure sales on a number of levels. If you are considering purchasing a foreclosed property, please contact us so we can guide you through the complicated process and protect your interests.
 
 
For more: http://bit.ly/apo6Tu
 
by RICH VETSTEIN

 

 

 
The owner’s policy assures a purchaser that the title to the property is vested in that purchaser and that it is free from all defects, liens and encumbrances except those which are listed as exceptions in the policy or are excluded from the scope of the policy’s coverage. 
 
Title Insurance and Why It Is A Must
 
 
"Prior to the invention of title insurance, buyers in real estate transactions bore sole responsibility for ensuring the validity of the land title held by the seller. If the title were later deemed invalid or found to be fraudulent, the buyer lost his investment".
 
 
 
Standardized forms of title insurance exist for owners and lenders. The lender’s policies include a form specifically for construction loans, though this is rarely used today.
 
Owner’s policy
 
The owner’s policy assures a purchaser that the title to the property is vested in that purchaser and that it is free from all defects, liens and encumbrances except those which are listed as exceptions in the policy or are excluded from the scope of the policy’s coverage. It also covers losses and damages suffered if the title is unmarketable. The policy also provides coverage for loss if there is no right of access to the land. Although these are the basic coverages, expanded forms of residential owner’s policies exist that cover additional items of loss.
 
The liability limit of the owner’s policy is typically the purchase price paid for the property. As with other types of insurance, coverages can also be added or deleted with an endorsement. There are many forms of standard endorsements to cover a variety of common issues. The premium for the policy may be paid by the seller or buyer as the parties agree; usually there is a custom in a particular state or county on this matter which is reflected in most local real estate contracts. Consumers should inquire about the cost of title insurance before signing a real estate contract which provide that they pay for title charges. A real estate attorney, broker, escrow officer (in the western states), or loan officer can provide detailed information to the consumer as to the price of title search and insurance before the real estate contract is signed. Title insurance coverage lasts as long as the insured retains an interest in the land insured and typically no additional premium is paid after the policy is issued.
 
Lender’s policy
 
This is sometimes called a loan policy and it is issued only to mortgage lenders. Generally speaking, it follows the assignment of the mortgage loan, meaning that the policy benefits the purchaser of the loan if the loan is sold. For this reason, these policies greatly facilitate the sale of mortgages into the secondary market. That market is made up of high volume purchasers such as Fannie Mae and the Federal Home Loan Mortgage Corporation as well as private institutions.
 
The American Land Title Association ("ALTA") forms are almost universally used in the country though they have been modified in some states. In general, the basic elements of insurance they provide to the lender cover losses from the following matters:
 
The title to the property on which the mortgage is being made is either
  • Not in the mortgage loan borrower,
  • Subject to defects, liens or encumbrances, or
  • Unmarketable.
  • There is no right of access to the land.
  • The lien created by the mortgage:
  • is invalid or unenforceable,
  • is not prior to any other lien existing on the property on the date the policy is written, or
  • is subject to mechanic’s liens under certain circumstances.
  • As with all of the ALTA forms, the policy also covers the cost of defending insured matters against attack.
 
Elements 1 and 2 are important to the lender because they cover its expectations of the title it will receive if it must foreclose its mortgage. Element 3 covers matters that will interfere with its foreclosure.
 
Of course, all of the policies except or exclude certain matters and are subject to various conditions.
 
There are also ALTA mortgage policies covering single or one-to-four family housing mortgages. These cover the elements of loss listed above plus others. Examples of the other coverages are loss from forged releases of the mortgage and loss resulting from encroachments of improvements on adjoining land onto the mortgaged property when the improvements are constructed after the loan is mad
 
 
 
For more: http://bit.ly/bj1GgO