Title Fraud: Does Title Insurance cover Fraud?

We hear the concerns of many homebuyers about the potential for title fraud, asking what they can do to best protect against it.

Title fraud is on the rise and while fraudsters mostly favor the targeting of properties that are unencumbered (free of mortgages), unoccupied/vacant, or unimproved, all property titles remain at risk.  In some cases, the fraudster forges and records a deed transfer in the public records and then proceeds to sell the property.  In other cases, the fraudster will attempt to impersonate the homeowner through cash-out mortgage application, leaving the homeowner without meaningful equity.

The good news is that, through the issuance of owner’s title insurance coverage, Federal Title can provide that protection with a Homeowner’s Policy of Title Insurance that specifically provides protection under “Covered Risks,” providing “Someone else claims to have a right affecting Your Title because of forgery or impersonation.”

The covered risk is just one of 33 different covered risks afforded to a homebuyer for a one-time premium paid at the time of closing. To determine the premium costs, we recommend using our popular closing costs calculator Quick Quote Closing Costs.

Many homebuyers ask us whether, in addition to the coverage provided in the Homeowner’s Policy of Title Insurance, they should also subscribe and pay the $199/year to one of the many title monitoring services.  For virtually the same level of protection at no additional cost, our insured homebuyers can simply email attorneys@federaltitle.com and request a “Title Status” once per year.

Count on Federal Title to be your go to resource for all things regarding your home title and deed questions. See other topics such as local legal updates and tips for homeowners and agents HERE.