Title Insurance; Owners Policy Too Cheap Not To Get

The new TRID requirements have language that reminds buyers that they do not need to buy an “owner’s policy” when it comes to title insurance. So some borrowers are opting out, and title companies are pulling their hair out b/c the “owner’s policy” is ridiculously cheap when purchased with the mandatory “lender’s policy.”

The “owner’s policy” ensures that no other person or entity can make a claim for title to a property. The “lender’s policy,” required by all lenders, ensures there are no other liens (or more senior liens) against the property.

When buyers purchase a “lender’s policy” and an “owner’s policy” at the same time, the cost of the “lender’s policy” is discounted so much that the “owner’s policy” is made very cheap (a few hundred dollars or less).

An “owner’s policy” is invaluable insurance relative to its low cost; we have had many instances over the years where buyers have needed to take advantage of the insurance.

There is little reason for buyers not to purchase an “owner’s policy” and this needs to be explained to buyers up front, as confusion about this fosters delays and the unnecessary opting out of owner’s policies.

Jay Voorhees
Founder/Broker | JVM Lending
(925) 855-4491 | DRE# 01524255, NMLS# 335646