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Title Insurance Company - Does it matter which company issue the policy?
Old 02-04-2012, 08:06 PM   #1
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Title Insurance Company - Does it matter which company issue the policy?

My wife and I are in the process of making an offer on a new house. The seller is supposed to provide an owner's title policy (California). Our agent suggested USA Title, I have never heard of them before, looks like they are in Florida.
Does it matter which Title company issue the policy? Is it just like property insurance, we need to make sure that they will still be around when there is a problem?

Any suggestions?

mP
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Old 02-05-2012, 06:24 AM   #2
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The short answer is 99% of the time no it doesn't. 5 years ago the number would have been 99.9%.

I'd argue that it is worth worrying about it if the property you are purchasing has been involved in foreclosure or short sale in the last 5 years. My theory is with all of the issues surrounding robo signing, forged or lost documents it is not too hard to imagine some lawyer contacting the previous owners of the property and saying the bank foreclosed on your property illegally. If this is part of class action suit the financially ability of the title company to defend your title is all that stands between you and some extensive litigation with stake being who owns legal title to your property.

I don't have any hard data to back this up, although I worried about it when I purchased my Vegas condo last year. In my case the escrow/title company offered policy from 3 title insurance companies and I veto two of them after reading their Moody and S&P ratings of the company. I've started making offers contingent on the seller providing title insurance underwritten buy a company with at least a single A rating by Moody's or S&P.

It is worth noting that ratings of most title insurance companies have dropped significantly in the last few years. Many now days are rated as BBB which is a few notch above junk status. My quick google of USA title didn't make me feel all that comfortable, but I only spent a few minutes looking.
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Old 02-05-2012, 07:52 AM   #3
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I preference this by saying, "in Florida", the title insurance policy is the choice of the seller since they normally pay for it. Anything is negotiable so one could put that in the offer. If I was the seller, I could say "pick who you want but you pay for it". I don't know what happens if a Title company goes out of business. Haven't run into that problem.
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Old 02-05-2012, 08:16 AM   #4
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Quote:
Originally Posted by JOHNNIE36 View Post
I preference this by saying, "in Florida", the title insurance policy is the choice of the seller since they normally pay for it. Anything is negotiable so one could put that in the offer. If I was the seller, I could say "pick who you want but you pay for it". I don't know what happens if a Title company goes out of business. Haven't run into that problem.
Anybody who deals in RE usually picks the title insurance when buying no matter who is paying...

It protects YOU, not the seller.... so you need to determine the company if you are worried...

When I bought my house, I looked at the tax authority to compare the seller with the records... like mentioned before, 99% of the time it does not matter...

Funny thing is the title company missed taxes that were past due... when I got the bill with interest and penalty, I just sent it to them and they paid...
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Old 02-05-2012, 10:23 AM   #5
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Thanks for the responses.
Last time I bought a house (the one we live in currently) was 22 years ago. Things may have chaged a bit.

I looked through Wiki and few others regarding Title Insurance. I googled Title Insurance Company but did not get much.

Anyone boght a policy recently and what company did you buy it from?

mP
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Old 02-07-2012, 11:39 AM   #6
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We bought from American Title in Jacksonville.
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Old 02-07-2012, 12:02 PM   #7
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Originally Posted by Texas Proud View Post
Anybody who deals in RE usually picks the title insurance when buying no matter who is paying...

It protects YOU, not the seller.... so you need to determine the company if you are worried...

When I bought my house, I looked at the tax authority to compare the seller with the records... like mentioned before, 99% of the time it does not matter...

Funny thing is the title company missed taxes that were past due... when I got the bill with interest and penalty, I just sent it to them and they paid...
I guess I have to ask what you mean by "anybody who deals in RE". Who are you refering to? I restate my case that the seller usually is responsible for the title insurance since it's their duty to provide clear title to the property and that's what the title policy is insuring--clear title. The seller is buying the title policy and therefore has the choice of companies. And, as I said it could vary by state, hence "in Florida", and is also negotiable as far as who is paying for the policy.
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