There are many advantages for cardholders who consolidate debt. If you are thinking about debt consolidation, then there are a few things you should consider before doing so.
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REAL ESTATE: TITLE INSURANCE
Title insurance is a special type of insurance that protects the beneficiary (insured) from loss in the event that it is determined that another person holds an interest in the real property subject to the insurance. Unlike many other forms of property which generally follow the "possession is 9/10ths of the law" theory, ownership of the full bundle of rights in real property is not always so clear. The law provides for many types of limitations on real property ownership -- from easements, to restrictive covenants and licenses. In addition, there can be defects in a chain of title, or overlooked interests resulting from improper transactions in probate (after the death of a person who held a prior interest in the property). Thus, when real estate is transferred from the vendor (seller) to the vendee (buyer), and the real property is used as security for a loan, the lender will ordinarily obtain 'Lender's Title Insurance'. Subject to the conditions stated in the insurance policy, the insurer will pay the lender if, as a result of a title defect, the lender is unable to obtain full satisfaction of its indebtedness from the real property (i.e. lender is insured that it will be paid first before all other lien holders). This is different from 'Private Mortgage Insurance'. PMI is insurance that the lender will recover a set amount from any foreclosure. Owner's Title Insurance is insurance that the stated owner has fee simple title in the real property.
Tip: Lender's Title Insurance will not protect the owner's equity in real property. Owner's Title Insurance is not very expensive ($100-300). If a title defect does appear, or if someone asserts a title defect, even if the claim is without foundation, it will cost you at least $200 just for a competent lawyer to review the matter. It is better to pay that money to the insurance company. If a real title defect appears, they have to both defend you, and indemnify you from loss.
We cannot offer legal advice without knowledge of all of the relevant facts. Thus, you should not rely on the above general statement in undertaking any course of action. This section is designed merely to raise issues that should be considered further. We urge you to call your own lawyer, or consult further legal source materials, before taking, or neglecting to take, any action that can affect your legal rights.
The above materials are copyrighted © Bowie & Jensen, LLC, 1995-1998; Reprinted by permission.
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