You buy a home. Everything is signed, sealed, and delivered. At long last, it's all yours -- land, house, lawn, trees, and mortgage. Time to celebrate! Maybe. Maybe not. What if, many years ago, a deed was forged on the property you just bought? What if there are unpaid taxes? Or a clerical error in public records? Or previously unknown heirs of a former owner? What if? Hopefully some of the questions surrounding your protection can be answered here.

What is Title Insurance?

1.      TYPES OF TITLE INSURANCE
Title insurance, issued by the title company and often required by lenders, guarantees the house is free of liens. There are two types of title insurance:

• A lender's policy protects the lender against loss due to unknown title defects, and guarantees that the lender has a valid first lien against the property.
• An owner's policy protects the buyer from unpredictable factors, ranging from human error to forged documents, that might emerge after a sale is complete. This type of title insurance has no annual premiums, only a small one-time fee provides you with this valuable protection.

2.      WHAT IF I DON'T HAVE OWNER'S TITLE INSURANCE?
If a problem with your title occurs and you don't have Owner's Title Insurance, you could lose everything you've invested in your home or face expensive legal costs.

3.      HOW DOES AN OWNER'S POLICY PROTECT ME?
If someone initiates a claim against your title, having Owner's Title Insurance provides you with a legal defense and, if your title should fail, reimbursement of the equity in your home up to the face amount of your policy. It also covers attorney's fees. In short, an Owner's policy from Vinopal Title protect you against losing your investment in your home.

4.      WOULDN'T THE LENDER'S POLICY PROTECT ME?
No. If there is a complete failure of title, you have no protection and would lose both your property and your equity in the property. The lender, because of their Lender's policy is the only one protected.

For example, let's say you purchase a piece of property in the amount of $100,000. The down payment on the loan is $20,000, leaving the loan amount at $80,000. However, your equity of $20,000 is not covered since you did not get an owner's policy. Now, what would happen is some matter arises affecting the past ownership of the property? The title insurance company will only defend and protect the interest of the lender because of the insurance of a loan policy. Your self as the owner would have to assume the financial burden of legal fees. If your defense proves to be unsuccessful, the result could be a total loss of title. The title insurance company would pay the lender's loss, and you as the borrower would lose your down payment and any other equity you may have accumulated of the property itself. Not to mention the amount you owe on the note if still due.

5.      How can there be a title defect if the title has been searched and policy issued? Title insurance is issued after careful examination of the copies of the public records. Here in Wisconsin, these records are stored in the Register of Deeds office and are available for any party to look at. But even the most thorough search by professionals cannot absolutely assure that there are no title defect present. In addition to matters shown by public records, other title problems may exist that cannot be disclosed in a search.

• Here are a few of the most common hidden risks that can cause a loss of title or create an encumbrance on title:
• False impersonation of the true owner of the property
• Unrecorded easements
• Invalid deeds delivered after the death of the grantor
• Forged deeds, releases or and other documents
• Undisclosed or missing heirs
• Invalid documents executed under invalid or expired power of attorney
• Mistakes in recording legal documents
• Misinterpretations of wills
• Deeds by persons of unsound mind
• Deeds by minors
• Deeds by persons supposedly single, but actually married
• Liens for unpaid estate, inheritance, income or gift taxes
• Fraud