Title insurance protects against fraud, defects

REAL ESTATE MAILBAG

June 12, 1994|By Michael Gisriel

Q: Why should I purchase title insurance if there has been only one previous owner [since the land was subdivided]?

) Brian Pollack, White Marsh A: Owner, as well as lender or mortgage title insurance, is always recommended for those purchasing a house. There is a one-time premium paid at settlement at rates set by the state. (In Maryland, the rate for owner's and lender's title insurance when purchased together is $3.50 per thousand dollars of coverage.)

Title insurance covers you forever against losses from a defect of title. The title examination will disclose the owner of the property and any recorded liens or exceptions against the title.

Title insurance covers you against any defects in title that are discoverable from a title examination -- that is, a review of the abstract of the original land records. And it also covers you against "hidden defects" -- such as forgeries, missing spouses not joined in the deed, mental incompetents or minors signing deeds, missing heirs and similarity of names. The only way for a purchaser to protect his investment is to purchase owner's title insurance. The owner's title policy will guarantee forever that the title is free of any defects and from any lien unless specifically set forth in the policy as an exclusion.

[Editor's Note: Title agents, like Fountainhead Title, usually receive most of the title insurance premium.]

Q: I want to buy a house in Baltimore City but I don't know how to judge which neighborhood is right for my family. Can you help me?

Alex Neeley, Baltimore

A: Neighborhoods have their own personality, and your real estate agent can give you information about them. But the real story can only be learned by talking to people from the neighborhood.

Baltimore is a unique city, with almost every area of the city

covered by a community association. A directory of neighborhoods is published by the city's Department of Planning, with boundaries and the name of the local association.

Call the association president from the neighborhoods you are considering and, perhaps, a nonprofit housing organization, such St. Ambrose or Neighborhood Housing Services.

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