ALTA: Absence of Title Insurance Risky

The American Land Title Insurance Association, Washington, contends that that 48.8 million homeowners are at risk because they lack an owner's title insurance policy.Title insurance is sold in two segments -- one that protects the lender, and another that protects the homeowner. Citing U.S. Census Bureau homeownership data, ALTA says 40% of homeowners lack an owner's policy. "It is standard procedure in a home purchase or refinance transaction for the lender to require a loan policy to cover the mortgage loan," said James Maher, executive vice president of ALTA. "An owner's policy, which is optional in many states, covers the homeowner's investment, such as their downpayment and equity up to the coverage limit. Unfortunately, many homeowners either don't know about it or don't think they need it, leaving them vulnerable." ALTA provides three situations in which it says an owner's policy would help the property owner: fraudulent property sales, conflicting wills (or no will), and missing or unknown heirs. ALTA can be found on the Web at http://www.alta.org.