What Is Title
For the lender, it is a guarantee that it has a valid and enforceable lien (loan or deed of trust) secured by the property, that no one else other than those listed on the policy has a prior claim (or loan, etc.) and that the party who they are making the loan does own the property being used as security for the loan. This protection remains in effect as longs as the loan remains unpaid.
Title insurance isn’t just for a homeowner. Sub dividers need it when they are planning a new tract of homes or a commercial strip center. Attorneys use it for clients who are investing; builders need it in order to obtain construction loans from their lender. Everyone wants peace of mind when making a large investment of their hard earned money. Title insurance companies help protect this important investment, no matter how large or small, with its own reputation and financial strength.
For the property owner, it is a guarantee that they own the property free and clear of any liens other than the ones agreed to when they purchased the property. The most important aspect is that the party who sold the property did, in fact, own all the interest and no one else can claim that they have an interest. This protection, or promise, last as long as the insured party owns the property.
Before issuing a policy of title insurance, the title company must review the numerous public records concerning the property being sold or financed. This information is available to anyone.