All Forum Posts by: Tom Gimer

Perhaps you’ve tried this already — it’s not clear from the fact pattern. 

Loan # is often found on page 1 (and elsewhere) of the recorded mortgage/deed of trust. If you have SSN of the decedent and loan # you should be able to call the lender and hopefully through an automated system request, as the borrower, the payoff to be FAXED to the # of your choice. 

No I'm saying for the attorney writing the opinion letter there is the same work and potential liability. While there is less admin work required and no title insurer to split premiums with (savings here), I'm guessing this would increase attorneys' E&O premiums (not here). Title companies who don't have an attorney in-house would be left out -- you can't share attorneys fees with a non-lawyer.

Plus FNMA is referring in their numbers only to the lenders coverage. What about coverage for the buyer? They'll be paying for their own title opinion... but to the attorney rather than a title insurer.

Just sounds like a shell game to me.

FNMA may not be far off as concerns "coverage" suitable for the lender... but you and FNMA need to think about all the actual elements in play here. There is math required.

If the title insurer is removed from the equation, that's one less mouth to feed (no % remittance to the insurer would be due) plus a lot of admin and post-closing work would be saved. 

Then there is the cost to issue an opinion letter to the buyer/borrower in a purchase. An opinion letter can only be relied upon by a client of the attorney.

Like I said anybody with a brain will do the math and charge accordingly for the work required and potential liability assumed.

We've had that discussion before on BP.

Guess how much any title attorney with a brain will be charging for an opinion letter. Yes, the same amount as a title policy because the work involved in issuing the letter and the potential liability are the same.

Here are a couple more examples of when the existence of a loan policy won't help the owner... encroachments, boundary issues, forced removal of improvements due to building permit and code issues, title issues that would not affect the lender's lien... or at least would most likely not cause the lender to take action which might help the uninsured owner.

And the reason another loan policy is required in connection with a refinance (in addition to the obvious reason -- there is a new insured) is that the period of time in which a defect might arise has just been extended to the date of the new policy. After all, the purpose of the new policy is to insure the lender that its new lien is in first (typically) position. No new policy = no new money loaned.

Attorney opinion letter of title + seller finance + general warranty = I was pretty well covered… except for having to handle the litigation personally.

My point was more about the danger of assuming nothing would arise now because it hadn’t in the past 20 years. 

As long as you've made an informed decision and are OK losing the $100k rather than spending X hundred $ to protect against that loss, I assume everyone here is fine with that. Good luck!

BTW a "good title search" is worth the paper it is printed on (or perhaps the cost of the search as max liability) without a title policy.

The basic sentiment of this thread is for the rest of us who aren't sitting on $5mm cash and can't afford to or don't wish to self-insure.

I'm in the title business and I have a story quite appropriate for this thread. ~6 years ago I purchased a property (seller finance) in WV using an attorney (not a title company) and was never even offered title insurance. (Neither was the seller/lender.) You can probably guess how this story unfolds.

Sure enough 4 years later out of the wordwork comes a lender from 2 transactions back (20+ years) claiming a HELOC was never paid/released and in fact continued to be drawn from by the prior owner/borrower. Was a ~$20k line now ~$50k owed.

Long story short I was at least able to defend myself, invoke the general warranty in my deed, add a claim against the attorney for malpractice... and the malpractice carrier paid the item days prior to the scheduled foreclosure.

To those who like to gamble and as I say to all buyers who decline owners coverage... Good luck!

That's a series of assumptions that I'm not willing to commit to! Is a title agent permitted to rely upon what appears to be an approved and recorded plat? Do the county or city have any liability?

And even if everything you have assumed is true there are exclusions and defenses to deal with. Yes, marketability might be a potential coverage matter also subject to that analysis... all in the context of GA law.

What hasn't been provided yet is some suggestion that the title company missed something material that should have been discovered. That something is the following requirement (or similar):  "... if a notice, describing any part of the Land, is recorded in the Public Records setting forth the violation or intention to enforce, but only to the extent of the violation or enforcement referred to in that notice."

Maybe post the plat reference or a link to it, along with the legal description in the deed.

Sure it doesn't hurt to file a title claim but I would be focusing on the seller hiding the issue. A title claim even if covered is not going to reimburse for the $100k reno or pay for any of the items the city is now claiming must be done to approve the subdivision.