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Written by Morgan DeNoers – 4 minute read
Why Title Insurance is a Must for Homeowners: Lessons from Connecticut’s Million-Dollar Fraud
In today’s post, we’ll explore the alarming case of real estate fraud in Connecticut, where a parcel of vacant land was transferred illegally. This case highlights the importance of title insurance for homeowners, protecting them from fraudulent claims and safeguarding their property ownership.
Understanding the Connecticut Case
The case involved a large parcel of land in Connecticut fraudulently transferred without the owner’s knowledge. Fraudsters used forged documents to gain control of the property and subsequently sell it to an unwitting buyer. This buyer then proceeded to begin construction on a $1.5 million home on that parcel of land. This case is particularly unique because there are two victims: the actual owner of the parcel and the individual who thought they were purchasing it to build. There were multiple instances where this could have been caught before the sale was completed but it never was. This case underscores the importance of thorough due diligence and title insurance, as unsuspecting homeowners can fall victim to fraud. Title insurance would have protected the homeowner by providing recourse in such scenarios.
Title insurance protects homeowners and lenders from potential legal disputes over property ownership. It ensures that the property you purchase is legally yours, free from prior claims or undisclosed issues. In the Connecticut case, title insurance would have been crucial in resolving the dispute and protecting the rightful owner from potential financial loss. The Connecticut case is not just a one off instance of this occurring. Graceland – the famous home of Elvis Presley – recently had a similar case of fraud.
When buying a home, always prioritize title insurance. It may seem like an extra cost, but it provides invaluable protection against unforeseen ownership disputes.
The Role of Title Insurance in Preventing Fraud
Title insurance companies perform a thorough search of property records to ensure no hidden liens, ownership disputes, or fraudulent transfers exist. In fraud cases like the one in Connecticut, this insurance serves as a critical defense, preventing unauthorized transfers of property. Without it, homeowners could face significant legal and financial consequences.
It’s important to recognize that different types of title insurance exist. Recently, title underwriters have begun offering enhanced policies, which provide coverage for fraud cases. One example is the First American Eagle Policy. However, with a traditional policy, fraudulent transfers made post-closing may not always be covered. At Pitt & Frank, we prioritize our clients by always issuing enhanced policies, ensuring they have the most comprehensive protection available. This added layer of security gives homeowners peace of mind against potential future risks.
In summary, the Connecticut real estate fraud case shows why title insurance is critical for protecting homeowners. It shields them from legal disputes and fraudulent claims, offering peace of mind and financial security.
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FAQ:
Q: What does title insurance cover?
A: Title insurance covers ownership disputes, unpaid liens, and fraudulent transfers, among other issues.
Q: Does title insurance cover future issues?
A: Traditionally, title insurance only covers issues that occured prior to purchasing the home. However many enhanced policies now cover future issues as well such as silent liens, off record matters such as claims of adverse possession, and incorrect surveys.
Links/Resources:
For more information on title insurance and protecting your property, check out these references:
Connecticut Million Dollar Fraud Case