Do I need Lenders Title Insurance??????

4 Replies

We are selling our rental and doing seller financing. The buyer is getting title insurance. What are the benefits for us as the lender if we get lenders title insurance? Thank you.

Hi Mark,  I would recommend speaking with your Real Estate Attorney or Title Company representing you in the transaction for the best advise.  In our market it is customary for the buyer to purchase lender title insurance for the lender / seller who is providing seller financing for the property.        

Ignore the fact that this is owner financing. 100% of residential lenders require lenders title insurance coverage on a 1st trust. I can bore you with the "why" if you like. Your buyer will get a discount for simultaneous owners/lenders.

I'm doing this exact thing tomorrow.

I won't require lenders insurance because my place in line is already established and has no chance of changing.

Lenders insurance protects the lender's position. Usually 1st position.  Makes sure they are first after recorded.

For the most part, a title co will recommend you get it... even if no new lien is being recorded. Like a barber recommending a haircut, HVAC guy a new unit...energy auditor new insulation.. pest inspector a pest treatment... insurance guy insurance.... It's what they do.

Originally posted by @Steve Vaughan :

I'm doing this exact thing tomorrow.

I won't require lenders insurance because my place in line is already established and has no chance of changing.

Lenders insurance protects the lender's position. Usually 1st position.  Makes sure they are first after recorded.

For the most part, a title co will recommend you get it... even if no new lien is being recorded. Like a barber recommending a haircut, HVAC guy a new unit...energy auditor new insulation.. pest inspector a pest treatment... insurance guy insurance.... It's what they do.

Hey -- you are mistaken regarding your place in line having no chance of changing. And if it ever does, there will be no title insurer to defend or prosecute your case and you will be paying your own attorneys to handle the matter. 

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