I agree that title insurance is often a rip-off; however; it is good to be insured if you ever have a legitimate claim. The fact is though that by the time the title company finishes their research and title review they are virtually assured that they will never ever have to pay off of a claim. If they do find themselves with a claim, they will do every thing in their power to deny its validity anyway. Even when the title is perfectly clear they will often deny insurance for fear that someone might cloud the title in the future.
My solution to your quandary is a practice of placing the subject property into the seller's land trust prior to the subject-to assumption and taking an interest in thrust versus the property. That way the existing title insurance (by virtue of specific insurance regulations), automatically inures to the borrower's inter vivos (land) trust and remains in place and fully in force.
To be reasonably assured that the property's title is still clear before I take over, I run two title searches (abstracts or lot books). The first run gives me the title company's current (usually outdated) information while triggering an updating of the general index from the county recorder's office. The second run is then the more accurate of the two, upon which I can base my decisions.
If I truly want or need new title insurance (would be rare), I can merely have the seller down-date his existing policy or get new insurance prior to creating the land trust.. The new coverage then inures to the trust in which I am a beneficiary, therefore covering me fully in the event of a future claim.
I agree that title insurance is often a rip-off; however; it is good to be insured if you ever have a legitimate claim. The fact is though that by the time the title company finishes their research and title review they are virtually assured that they will never ever have to pay off of a claim. If they do find themselves with a claim, they will do every thing in their power to deny its validity anyway. Even when the title is perfectly clear they will often deny insurance for fear that someone might cloud the title in the future.
My solution to your quandary is a practice of placing the subject property into the seller's land trust prior to the subject-to assumption and taking an interest in thrust versus the property. That way the existing title insurance (by virtue of specific insurance regulations), automatically inures to the borrower's inter vivos (land) trust and remains in place and fully in force.
To be reasonably assured that the property's title is still clear before I take over, I run two title searches (abstracts or lot books). The first run gives me the title company's current (usually outdated) information while triggering an updating of the general index from the county recorder's office. The second run is then the more accurate of the two, upon which I can base my decisions.
If I truly want or need new title insurance (would be rare), I can merely have the seller down-date his existing policy or get new insurance prior to creating the land trust.. The new coverage then inures to the trust in which I am a beneficiary, therefore covering me fully in the event of a future claim.
Bill Gatten