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To: PeterPrinciple

If there is fraud due to existing forged documents I don’t see any pre purchase remedy for that unless the title insurance specifically states that the insurance covers it.

An attorney could do reasonable due diligence and still not catch it if the fraud was executed by professional fraudsters rather than stupid amateurs.


40 posted on 07/30/2023 9:17:18 AM PDT by cgbg (Claiming that laws and regs that limit “hate speech” stop freedom of speech is “hate speech”.)
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To: cgbg

https://www.deeds.com/articles/an-opinion-of-title-what-home-buyers-should-know/

If the Title Opinion Looks Good, Why Get Title Insurance?
An attorney’s opinion reflects the status of a property based

on information in the public records. It does not explore the many kinds of undisclosed title defects that might lurk in chains of ownership.

In contrast, a title insurance policy is assurance against those unknown title defects and unrecorded easements. Title insurance also covers fraud and forgery, defective deeds, recording errors, and other possible title problems.

Another difference is the buyer’s recourse for reliance on these different kinds of assurances if something goes wrong. Consider the scenario where an attorney relied on a hasty
search, and erroneously stated the title was free and clear of recorded claims. In this case, an owner who relied on the faulty title opinion would have to ask a court to determine that the attorney was negligent.

In contrast, the title company issuing an insurance policy, for a one-time fee, already agrees to help the owner resolve covered title defects, for as long as the owner has the house. Title insurance is commonly purchased with a home, except in Iowa, which offers a state-backed title guarantee.


Yes this is a can of worms. If the buyer has title insurance, but not clear title, it would appear it does cover fraud?

Iowa is unique. The lawyer pays for the state backed title insurance, leaving it first to the lawyer to be VERY careful and resolve it before doing a claim on insurance. A good way.


43 posted on 07/30/2023 9:30:56 AM PDT by PeterPrinciple (Thinking Caps are no longer being issued but there must be a warehouse full of them somewhere.)
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