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real estate law: lender's title insurance vs. buyer's title insurance

I've dealt very little with real estate law, but ran into a therewillbeblood07/15/18
Lender's policy typically only covers the amount of the loan 3lol07/15/18
That, and the coverages can be different. For example, an o jeffm07/15/18
A lenders policy will not cover the owner. Once you purchase wtretire07/16/18
These insure two different things -- a lender's policy insur bobloblaw774908/13/18
therewillbeblood (Jul 15, 2018 - 10:38 pm)

I've dealt very little with real estate law, but ran into a question I'm not sure about. Obviously you're supposed to advise people that to be safe they should get their own title insurance, even if their lender gets it, because the lender is only protecting themselves.

Wouldn't in most cases any action the lender's carrier attorneys take also benefit the buyer? I would assume they would sue to quiet title, so the borrower would in theory benefit from those actions. Is there a common response by lenders to an attack on the borrower's title that would screw over the borrower?

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3lol (Jul 15, 2018 - 11:01 pm)

Lender's policy typically only covers the amount of the loan, not the value of the entire property. Also the lender is not suing on anyone's behalf once the mortgage is paid.

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jeffm (Jul 15, 2018 - 11:21 pm)

That, and the coverages can be different. For example, an owner's policy might exclude any rights of parties in possession, whereas the lender's policy will not.

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wtretire (Jul 16, 2018 - 9:07 pm)

A lenders policy will not cover the owner. Once you purchase a lenders policy the owners policy cost next to nothing at least in the states I practice in. I have a deal now where the lenders policy is over 6k and the owners policy is 25 bucks (if we just took owners it would cost us over 6k).

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bobloblaw7749 (Aug 13, 2018 - 11:48 am)

These insure two different things -- a lender's policy insures the mortgage whereas an owner's policy insures the owner's estate in the real property (e.g., fee simple). The posts above are generally correct that the parties' interests are aligned. That is, if there is a title issue while the mortgage is outstanding, the title company would defend to the benefit of both the lender and the owner. Always get a new owner's policy if you are getting a loan policy -- nominal cost.

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