Texas Attorney General Greg Abbott recently commented about how title insurance protects homeowners. American Land Title Association (ALTA) President Mark Winter applauded the attorney general for recognizing the value title insurance provides to consumers.

 

Abbott's comments came after the a South Texas developer had been charged with defrauding homebuyers by selling houses that were encumbered by undisclosed liens.

 

ALTA is a national trade association representing more than 3,000 title insurance companies, title agents, independent abstracters, title searchers, and attorneys.

 

'This is the perfect example of how an owner's title insurance policy could have protected the interests of the homebuyers,' Winter said. 'For a one-time fee a title search would have uncovered any existing liens and a homeowner's title insurance policy would have provided the homeowners assurance their property rights were protected.”

 

“Casa Linda Homes sold residential properties encumbered by different liens, including liens for delinquent property taxes; liens of a third-party lender; or mechanic's lien for labor or materials used to improve the property,” Abbott said.

 

Buyers had no idea about the undisclosed liens by title companies, as Casa Linda did not require homebuyers to purchase title insurance. Thus, the developer could sell the properties without homebuyers realizing that their new houses were subject to undisclosed liens. When Casa Linda Homes subsequently failed to pay its undisclosed debt, the creditors who were owed money then instituted foreclosure proceedings or filed lawsuits against the home buyers.

 

 

'We encourage policymakers across the country to engage with title professionals in their state to become educated on the preventive measures title agents take to eliminate claims and protect consumers,' Winter said.

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