A title insurance policy is a great way to reduce the risk of complications during a real estate transaction. This may include various types of fraud, along with a range of other benefits. In this review, we discuss how title insurance may be able to reduce the risk of wire fraud occurring and the additional advantages policyholders receive with a title insurance policy and when working with a reputable title insurance service provider.
What Is Wire Fraud?
Wire fraud is a type of real estate fraud where the fraudster steals money during a real estate transaction. In most cases, this involves the diversion of funds away from the intended recipient and to the fraudster.
In other instances, someone involved in the sale may directly send the fraudster funds during a real estate transaction. For example, a fraudster may gain access to the lender or title company’s email, and they may lead the buyer (via the hacked email) to send a wire payment to the wrong account.
Does Title Insurance Protect Against Wire Fraud?
Title insurance may help buyers, sellers, lenders and others involved in the home sale process protect themselves from wire fraud. It is able to severely reduce the risk of wire fraud occurring as the title insurance company closely monitors all activities involved with the title (and closely monitors the sales process overall).
They have the ability to quickly detect any concerns that arise and address them before fraud occurs. Should an incident occur, the insurance will step in to assist with the costs to defend your title and rights.
What Additional Benefits Does A Title Insurance Policy Provide?
In addition to legal and financial protection against cases of wire fraud, a title insurance policy may also provide clean title assurance, legal protection and help allow for a fast property transaction.
Title Protection
The primary purpose of a title insurance policy is to protect the policyholder from financial loss if a title dispute occurs. Notably, title insurance protects you financially in the event there are hidden liens, errors in public records and other types of ownership disputes. Without title protection via a title insurance policy, sellers, buyers, lenders and real estate agents could face substantial legal and financial challenges.
Financial Assistance
Title insurance policyholders are protected from costs associated with lawsuits, title disputes, and more. This reduces the overall risk for the policyholder or those involved with the sales process.
Clean Title Assurance
Title insurance providers want to ensure the title that is being transferred is clean by conducting extensive research of the current title status and its history. Specifically, a clean title means there are no unpaid taxes, legal obligations or fraud with the title. This helps ensure a smooth transfer process without any setbacks.
Peace Of Mind
Title insurance policies provide peace of mind for the policyholder as they know their title is well-protected. The title insurance company keeps a close eye on the title to ensure no fraud occurs and will promptly take action if fraud does occur.
Additionally, the policyholder is financially and legally protected in the event issues do arise. Often, the title insurance provider works with an underwriter who issues the insurance policy and provides financial coverage for any claims made. This means the policyholder does not have to worry financially throughout the sale and title transfer.
Fast Property Transaction
You may also experience a much faster property and title transaction with title insurance. This is because it is easier and faster to verify the details of the transaction and ensure the title is clean. Consequently, this also reduces the risk of setbacks, which further ensures you are able to close the sale of your home and transfer your title faster.
Who Needs a Title Insurance Policy?
Title insurance is often a good idea for multiple parties, including the lender and the owner. During a real estate transaction, it may also protect all other involved parties. There are two primary types of title insurance policies, which are:
- Owner’s policy – This policy protects the owner of the home and title (the one whose name is listed). In the case of a real estate transaction, the buyer and the seller may benefit from title insurance. An extended owner’s policy may be a viable option for owners who need or desire higher limits and reduced risk.
- Lender’s policy – When financing a mortgage for property, this policy protects the lender’s investment. If any issues arise with the title, the lender is financially protected.
Surprisingly, for all of the benefits title insurance provides to multiple parties, the cost of a title insurance policy is usually only .5% to 1% of the purchase price of the home. It is a one time payment which provides coverage for the duration of ownership of the property. For as long as you own your home, you are protected.
Need Title Insurance and Protection? Contact Mathis Title Company Today
Mathis Title Company offers title company services and related legal services for buyers, sellers, lenders and real estate agents. If you are concerned about potential write fraud and would like to learn more about how title insurance can help you protect yourself financially and legally, contact Mathis Title Insurance Company today at 703-214-4020 or schedule an appointment online.
