March, 2006
Who Needs Title Insurance?
The way the title industry is being attacked in some parts of the United States, it seems as though some people don’t think title insurance is important at all, and if it is needed, it is over priced. The people making the charges may have an example of some extreme exception to the normal transaction. Generally the parties making the attack do not understand what title insurance is and base their opinion on the extreme exception or an abuse of the laws. As far as price competition, there seems to be more than the recognized standard in most markets.
A recent Wall Street Journal article about title insurance had a complete misstatement about Lender coverage. The statement was: "Lender’s coverage protects the mortgage-issuer if, say the homeowner defaults on a loan." It did not state how it protected the Lender, but the inference was that the loan balance was paid to the Lender. It went on to say: "A homeowner’s [title] policy is designed to guard against the prospect of smaller problems if, say a utility company uses an undisclosed easement to build a power line across the property which might have an impact on the owner’s use of the land, but not necessarily matter to the Lender." Having an unexpected utility line cross property was characterized as a small problem. The author might not think it was a small problem if he suffered an unexpected high power line installation across his property.
Lender’s policies do not insure repayment of the indebtedness of the mortgage loan! If that author researched title insurance and came up with that understanding, something is wrong. Either he did little research or his sources were not knowledgeable about title insurance coverage. Loan policies give the lender protection that the mortgage loan was created properly. The title company examines the status of the title of the land being offered as collateral. The legal description of the land is examined and researched to determine if there are any defects in the wording. Determination is made that there are no overlaps with adjoining property descriptions. After the ownership of the land is established, name searches are made for liens against the owners. Those liens attach to their land. This search work is performed by dependable highly trained persons. The results are then presented as an insurable item. Lenders have the confidence that their mortgage loans have the proper collateral.
The cost of title insurance has been criticized. This occurs because there are fewer claims compared with other forms of insurance. The higher percentage of claims an insurance company pays should not be equated with the value of the coverage. Most types of insurance cover incidents in the future based on the insurer’s estimate of the amount of claims and when they may occur. Reoccurring premiums are paid during the life of the policy and premiums can increase. Title insurance, on the other hand, is based on loss prevention, which means that a much larger percentage of the premium is spent preventing title problems from occurring. These upfront costs cover searching, identifying and eliminating risks that could result in a future claim. This is done by experienced title professionals. The cost for title insurance is a one-time fee for the life of the policy and claims could be filed 50 or 100 years after the policy was issued. The most common problem resulting in title claims are the result of fraud and forgery and, when there is a loss it is usually significant. If it happens to you, you need to be protected.
There have been cases where title companies, agents and employees have acted improperly. That makes the news. The majority of the transactions covered are handled correctly. "Who needs title insurance?" The answer is everyone who purchases real estate or who borrows money using real estate as collateral.
Carroll County
Effective Monday, March 20th the Carroll County Recorder will require the use of the NEW P-Tax form or a copy of the most recent tax bill attached to the old form.
Mary Lou O’Brien joins HBW Team
We are pleased to announce that Mary Lou O'Brien has joined our HBW team. Mary Lou has been employed with Lee County Title for the past eight years and prior to that she worked for Rockford Title. She will be based out of our Rochelle office, however, she will also be helping us service our customers in our Oregon and Dixon offices. Mary Lou is an escrow closer and also does construction escrow. We are looking forward to having Mary Lou with us. Please join us in welcoming her.
Branch Manager of Rock Island Office
It was announced by Daniel D. Mennenoh, President of H. B. Wilkinson Title Company, Inc. (HBW), a Galena-based title insurance and real estate information services provider, that Attorney Brent Fetterolf has been named manager of the Rock Island office of HBW. The office located at 1703 Second Avenue provides a full range of title insurance services including abstracts of title, commercial and construction escrow services, sale and refinance closing services and real estate information services throughout the Quad Cities area.
Mr. Fetterolf received his BA degree from the University of Illinois and his Juris Doctorate from Southern Illinois University. He joined H. B. Wilkinson Title Company in March, 2005. He served as surveying crew chief with American Surveying Consultants in Dixon before joining the law firm of Feirich, Mager, Green and Ryan in Carbondale in 1997. Most recently, he was in private practice in Kankakee for three years. His responsibilities will include managing the operations of the office and assisting in business development in the Quad Cities area.
"We are very excited about the growth of the Rock Island office," stated Mennenoh, HBW’s president. "We are fortunate to have Brent’s experience as a resource for customers in this market area. H. B. Wilkinson Title is a strong regional company that provides a variety of services to a wide geographical area including northern Illinois and eastern Iowa. "
"H. B. Wilkinson Title takes a customer and market-driven approach to the title business by developing innovative solutions to our customers’ problems,’ stated Mr. Fetterolf. "With our expanded menu of title products, HBW can facilitate virtually any transaction and customize services to specific customer needs."
H. B. Wilkinson Title Company provides an innovative range of title insurance, closing and real estate information services including abstracts of title, title searches, title insurance, and construction and commercial escrows for properties located throughout sixteen counties in northwest Illinois and eastern Iowa. The company currently operates from a network of ten offices located in Galena, Morrison, Mt. Carroll, Sterling, Dixon, Oregon, Rockford, Rochelle, Freeport and Rock Island. The company has formed an alliance with Chicago-based Greater Illinois Title Company (GIT) to provide a network of 26 offices across northern Illinois for customers to choose from for their title insurance and closing services. To contact the Rock Island office please call 309.794.0518.
