Why Do I Need Title Insurance?

Before purchasing a home, it is vital that you have a better understanding of title insurance policies that are available for both lender and homeowner protection.  If obtaining a mortgage, title insurance will be a requirement to shelter the lender for the full amount of the loan until it is completely paid off. 


However, owner title insurance will be something you need to consider if you want to protect your own interests as well, since the aforementioned would not cover your own equitable interests in the property.  Typically the purchase of an owner policy can either be covered by the seller, or is something that you can include along with the lender policy for a small investment.

When purchasing a home, buyers are actually obtaining a right to occupy the land and property space which comes in the form of a title.  Therefore, insurance is necessary to identify any issues that may be attached to the title of the home before closing on the property. 

Several Issues That This Search Could Uncover Include:


  • Easements that may allow for roads, sidewalks, cables, etc. to be built on your land.
  • Judgments or liens that are a result of unpaid taxes or money that is owed.
  • Errors or forged signatures contained within deeds, trusts or wills.
  • Undisclosed heirs or rightful owners to the property.
  • Additional legal issues or pending suits such as divorce that could affect the purchase.


Owner title insurance will protect both homeowners and their heirs from any claims that arise as a result of problems that were initiated prior to obtaining the coverage.  In the event that you were to inherit your own liens or judgments against the home, a new policy would then protect the next buyer if these bills were overlooked and remained unpaid upon closing.


Did you know that approximately 1/3 of all title searches will uncover some type of issue on a property?  Although these tend to be extremely thorough and accurate, there are still those rare instances where certain matters will remain undetected.  Title insurance is therefore the solution for any such cases that may arise.

In the event that you purchase a policy and claims do arise, the policy will reimburse you for any losses that are incurred under the coverage.  Therefore, the stress, fees and wasted time that you can avoid when faced with such unfortunate circumstances are well worth the small investment.

To obtain information on reputable title companies that I highly recommend before your next purchase, feel free to contact me using the information included below.

Rhonda Miller: 405-820-1740

Get The Best Price On Your Next Home Purchase!

One of the most important aspects to buying a home is to ensure that you purchase for a fair price.  Since there are certain key steps that you must follow in order to make a sound decision, it pays to have a knowledgeable Realtor on your side who will be able to help obtain the best and most realistic asking price for a property.


Determining Market Comparables
For example, one of the first ways that your agent will discover the price of a home is by researching local market comparables.  In most cases, they will be able to bring up a list of properties sold over the last 6 months within a 1 mile radius.  Properties should also not be bigger than 20% of the subject size.

Additional features to consider would be the neighborhood each home resides in, structural differences, bedrooms and bathrooms, overall condition and other amenities such as a pool, a/c, or garage.  Other factors, such as if a particular home sold for much lower due to foreclosure is something your agent can uncover as well.

Houses That Have Not Sold

Next, many homes could be on the MLS for 6 months or longer without ever selling.  Others that are comparable could have been taken off the market after not getting enough offers or being listed for too high.  This is valuable information, because you may be able to get a particular property for a substantial discount or it may not even be worth pursuing. 

Neighborhood Reputation & Appreciation

When it comes to buying a house, this is one of the most important reasons to work with a Realtor.  Since your agent will have a familiarity with various local market trends and statistics, you will be able to learn what makes a particular neighborhood desirable and also which areas to avoid.

A lot of things can affect a home’s value such as the school district, crime levels, or even other properties located nearby (such as those burnt in a fire or properties that were a bank sale).  In fact, sometimes these factors can even differ from block to block!

Your agent will also help you to assess the appreciation rates for various neighborhoods and future development plans that could affect home prices, so that you can get a decent indication of what to expect down the road.  This can be extremely valuable information dependent on how long you plan to live at the said property and the length of time the home may need to sit on the market.

Appraisals & Inspections

After you place an offer on a property, you will have the opportunity to get an appraisal and home inspection as further due diligence.  Even with an agent, there are sometimes issues that may arise with a property that could affect the home’s value that you were not even aware of.

Some of these problems could include structural issues, plumbing or electrical, termites or insects, mold or even water damage to name a few.  Obviously many of these things could impact the price significantly and would either have to be fixed by the seller or renegotiated to get a fair price.

In conclusion, there are a lot of areas to consider when choosing a home and getting a fair price on a property.  Since this is one of the biggest purchases you will ever make, it is crucial that you protect your interests and ensure that you are getting the best deal possible. 

Be sure you are working with a Realtor! 

Stopping Latest Fraud Wave Comes Down to Lenders


The ways in which the industry can prevent fraud are evolving along with the nature of fraud itself, and the answer to preventing one of the latest waves of fraud appears to lie in finding new and better ways to track participants and their information in distressed home sales as well as in mortgage transactions.

Addressing the types of deceptions seen today is a very different matter than when the housing industry was booming early last decade, and mortgage fraud was not scrutinized and investigated by federal agencies as persistently as today.

Between 2005 and 2007, Interthinx conducted an origination study and found fraud in 13% of the sample. Traditionally, the industry is around 1% to 2%, said Ann Fulmer, vice president of industry relations for Interthinx, and that is why people did not pay attention to mortgage fraud during the boom.

In contrast—with unemployment rising, home prices continuing to fall and defaulting properties still at high levels—today lenders have decided to crack down on mortgage fraud by reviewing various mortgage applications such as income documents and appraisals more thoroughly. These changes in policies and practices have forced fraudsters to be very clever when thinking of their next scheme that preys on vulnerable homeowners.

According to mortgage fraud analysts, one of the prevalent trends that has developed in response to this situation has involved “flopping” a distressed property for a lower price than what the lender is owed. The property being “flopped” is usually owned by an underwater borrower that can't afford to pay their mortgage, is facing foreclosure or is considering a short sale in which a real estate agent usually values the property to be less than what can be earned on the open market.

The lender agrees to take the lower price and the agent then purchases the property in his name or the name of a straw buyer who then decides to sell the asset to a non-arm's-length buyer, typically an investor, that the lender is unaware of for an inflated price either the same day or very soon after the initial sale.

Frank McKenna, vice president of fraud strategy at CoreLogic, said fraudsters make between $50,000 to $100,000 for “flopping” a single property. He added that lenders lose more than $375 million a year alone on single-family residences when they sell undervalued houses based on the broker price opinions submitted to them by the dishonest real estate agents.

“This has gotten to be quite a big problem and most borrowers don't know about it,” McKenna told National Mortgage News. “Shady, manipulative people are taking advantage of borrowers that are distressed in their property. They are going out there saying there is money to be made and I know there are a lot of unfortunate people who cannot afford to pay their mortgages, so I will take advantage of them as well as their lenders.”

With less than one out of 50 homes being “flopped” nationwide, representing less than 2%, McKenna said this trend is common today because of the number of properties that are in trouble throughout the country.

“Flopping also hurts neighbors because when you have a property that sells for an artificially low amount, it affects property valuations in an entire community and makes the market that you are living in less secure, causing lenders to have more scrutiny,” McKenna said.

Fulmer said default-related fraud schemes, predominantly short sales, are so popular today because the “flipping” portion of the scam (the higher-priced sale or sales that occur after the initial “flop,” when a lender unknowingly sells the property to a fraudster for a lower-than-market price) is generally an all-cash transaction difficult to track.

Fulmer said Interthinx is currently developing a short sale solution that looks for patterns to identify the participants in a transaction more quickly. She added that limited testing is being done right now and there is no specific date when this product will be available for servicers and lenders.

“Fraudsters do not go into a bank thinking they are going to lie to get a loan on a house they can't afford to buy,” Fulmer said. “They are coached by somebody. About 99.99% of borrowers are not criminals.”

In order to catch fraudsters, Fulmer believes it is important for lenders to go beyond just using automated technology to verify the paperwork that is submitted during the mortgage application process. She thinks that underwriters should be trained to analyze the documents to notice any possible sign of fabrication or forged signatures.

“It is a lot more sophisticated now because fraudsters are not using white out anymore, but Adobe Photoshop,” Fulmer said. “Underwriters should have a 'does this make sense” kind of approach when reviewing the documents.”

According to Fulmer, the biggest misrepresentation in forged documentation relates to an individual's income, both in the origination and loan modification sides.

“Sometimes, the false records are so obvious where a bank statement on the first page says one of four, but the second page says two of six,” Fulmer said. “We have seen cases where they have been absolutely fabricated and one of the tricks they like to do is use a false bank name with a made up address. It is important for lenders, risk managers and quality control people to start thinking like a criminal to keep bad loans from closing and preventing fraud from taking place.”

McKenna concurs with Fulmer that the primary way to stop mortgage fraud is for lenders to take on more responsibility before approving a loan or allowing funds to be disbursed from one person to another.

“Typically, when you have fraud, you will see something about a person, whether it is a real estate agent appraiser, broker or internal loan officer, who is exhibiting a pattern in the data that looks abnormal,” McKenna said. “We can make fraud much less commonplace by really scrutinizing people and the transactions by getting rid of the bad ones as often as we can. That will make fraud less common.”
Courtsey of Sr Mortgage Officer
Gina Starr
NMLS# 227483
Red Rock Mortgage & Lending LLC
405-210-3900