A homeowner's title-insurance policy will protect a purchaser of a previously foreclosed property should ownership issues arise because of a servicer's foreclosure documentation practices, the American Land Title Association (ALTA) maintains.
Reports that lenders improperly documented paperwork in the foreclosure process raised questions about the validity of title to foreclosed properties that have been resold, sparking fear that homeowners who purchased in good faith could lose their home.
‘An owner's policy provides assurance that your title company will stand behind you if a covered title problem arises after you buy your home," says Kurt Pfotenhauer, CEO of ALTA. "The bottom line is that your title company will be there to pay valid claims and cover the costs of defending an attack on your title."
SOURCE: American Land Title Association