What is Title Insurance?
It is insurance against loss or damage resulting from title defects or loss of rights to a particular parcel of real property.

  Why do I need Title Insurance?
To protect the most important investment you'll likely ever make - your real estate investment.
Without a title insurance policy, you may not be fully protected against errors in public records, hidden defects not disclosed by the public records, or mistakes in examination of the title of your new property. As a result, you may be responsible for any or all prior liens, judgments or claims brought against you and your new property. The good news is your policy insures that if such an event arises, you will be defended free of charge against all covered claims and paid up to the amount of the policy to settle valid claims.
  What are the types of Title Insurance?
There are two primary types:
The first one protects the new property owner or the buyer. Owner's Coverage is issued at the time the buyer purchases the property. Coverage is paid based upon the purchase price or the loan amount, whichever is greater. Coverage continues as long as the buyer or the buyer's heirs have an interest in the property. Please note that an Owner's policy is typically not issued when you refinance, because ownership did not change.
The second one protects the lender or bank. Lender's or Mortgagee's Coverage protects the lender's investment in the property. This policy insures the lender against title defects that may affect the security of the mortgage loan - not the buyer's investment. The lender's title insurance policy is based on the amount of the loan or mortgage. Even if the lender has a title policy, the buyer still needs an owner's title policy in order to protect his/her interest and equity.
  What are some examples of Title Defects?
Here are just a few of the most common hidden risks that can cause loss of title or create an encumbrance on title:
>False impersonation of the true owner of the property
>Forged deeds, releases or wills
>Undisclosed or missing heirs
>Instruments executed under invalid or expired power of attorney
>Mistakes in recording legal documents
>Misinterpretations of wills
>Deeds by persons of unsound mind
>Deeds by minors
>Deeds by persons supposedly single, but in fact married
>Liens for unpaid estate, inheritance, income or gift taxes
  How long does the coverage last and who does it protect?
For a one-time premium, an owner's title insurance policy remains in effect as long as the insured, or the insured's heirs, retain an interest in the property, or have any obligations under a warranty in any conveyance of it.
As for the Lender's policy, it's the same as above except conversely and applies to it's successors and/or assigns as their interest may appear.
  What is the cost of a policy?
When you buy a property, it's based upon the purchase price. When you refinance, it is based upon the loan amount. The premium is paid only once and remains in force for as long as the property is owned by the insured.
  What is a title search?
A title search is the process of determining from the public records: Property owner(s), Chain of title, Mortgage liens, Tax liens, Mechanics liens, Municipal Liens, Judgments, Easements and Restrictions, etc. A thorough search assures that the buyer is getting all the rights to the property (title) that he or she is paying for.
  What do I need to bring to settlement?
Besides a well lubed arm for signing, you'll need:
Government issued, unexpired photographic identification for all parties involved in the transaction.
A cashier's check or a certified check for any and all balances due at settlement.
Please note that in the event if you're not sure about the exact number, we suggest you also bring your personal checks. For example, if you're short 25 dollars, cash is not an option. This also applies to over 99.9% title companies out there.
  Why Title insurance is needed for a refinance?
It's because a separate policy is needed by the new lender. The new lender requires assurance that their mortgage or loan is going to be in highest priority lien position or known as "first position". If you have a second loan, the second lender also requires assurance that their loan will be placed in the "second position", not 3rd or 4th.
The other reason why the new lender requires title insurance is because they do not know what exactly has happened to your property, if anything at all. Therefore, the lender relies on a Title company to assure and insure against unknown liens, judgments, etc.
This applies even if you'd refinance 3 months ago.
Lastly, Lenders also insist on a new title policy because many mortgages are packaged as securities and sold to investors in the secondary mortgage market. Title insurance is the only practical way to provide the assurance investors demand and to ensure that the mortgages backing these securities are valid and enforceable.