Why marketability of title insurance is forward

[pbmaise]

Kapohocat
You raise an interesting point about conversions into revocable living trusts RLT. Wells Fargo permitted you to do it. I was consulted on this question since people wanted to know if it was cause for the bank to charge a violation of the mortgage.

Why would the end bank permit it unless, after the RLT conversion, the Lender's Title Insurance policy we required you to buy was still valid?

Now that brings me to a question. How can the homeowner's policy die, and Lender's policy still live?

Why would a lender permit the homeowner to become naked without the required homeowner's policy?

I admit I have not researched this issue much, however, both suspect and confirmed via a real estate attorney and article in the Washington Post that the death upon RLT is a lie.

See:

Harvey S. Jacobs real estate lawyer

http://www.washingtonpost.com/realestate...story.html

I admit up till reading his article I also was understanding the homeowners policy died.

What I suspect is someone filed a claim in the name of the RLT before revocation. The title company then said hang on a tick, who are you? Claim denied. Then I bet they revoked the trust, and the Title company said claim was filed too late. Claim denied.

In this thread I am not trying to prove RLT conversions do not kill the Homeowner's policy. However, you help to prove the point that the document is alive after closing.

It is alive and gives the buyer of the policy rights if the title becomes unmarketable in the future.

Now: Let's look at me. I have a $ 1/4 mm line of credit on my home. It is public record. Wells Fargo provided me that LOC. If they didn't, instead of being able to utilize capital invested in my home to buy a sailboat and sail across the Pacific I would have been locked into Puna.

Sophisticated buyers look at 2% and 3% money from the bank in the form of a LOC when deciding to buy. WF will not offer a new buyer of my home a LOC. Yet, my home is no where near the flow, and both I and WF are insured.

Nothing physically happened to my home. It was an attack on my title that has caused me harm.

The ability for a reasonable new buyer determines if Title has been damaged.

To prove damage to my title all I need do is show Wells Fargo continues to offer LOC on homes in other parts of Hawaii but they have red-lined my entire neighborhood

[pbmaise]

Seeb,
Marketability and unmarketability are not determined by you. People like me determined it for you.

There was nothing BS about it. My signature was not applied below a borrowers unless I knew the property title was marketable.

You were not permitted a loan plain and simple.

And I was right to do so.

I specifically had knowledge that rendered the property unsuitable.

The big change now is all properties are unsuitable with no justified logic.

In 1927, the Mississippi flooded 27,000 square miles of land sweeping away thousands of homes. In 2010 in Tennessee a more localized overflow again covered thousands of square miles.
The response wasn't to ban all future lending and insurance

[Jeffhale]

I think you're arguing a moot point pb. As indicated, which is what I've understood having vested in several real estate transactions myself. Title insurer may cover an encroachment, but this is past, all previous citings in which the seller bears responsibility. Title insures, assumes that burden.. It insures both you and the seller that it transfers free and clear, up until you (buyer) own it. It insures that if later you discover a none disclosed event,, they'll cover the expenses to a prescribed limit to make it whole. .

But, it does not assume the future or whatever happens to the marketability once you've taken possession. If a atom bomb got scheduled, making plans for, to explode in your property, 5 years into the future, the very minute you took possession, it would be unforeseeable, future event.. Unless you could provide evidence the seller was aware..

what's worse is,, it's doubtful that anybody who's bought land, taken title near a volcano, doesn't know the risk. the property was marketable the day you'd bought it, you are your worst witness to that fact. if it becomes unmarketable, because Mauna Loa blows it top, 1 minute later, tough luck.

However, have at it, there's nothing I'd like better, at this juncture, than to flip my property @ 150% to an insurance company! [wink].

[Seeb]

Ahh, a mortgage broker - the plot thins

[pbmaise]

Jeff,
A risk to your person, your land, and your home is different then an attack on your title.

Listen to what many say. Phrases like, you shouldn't have bought there in the first place. You assumed risks. The Government is justified. Banks have a right.

The rug has been pulled out from residents in all of Lava Zone 1&2. It was a combination of available services to you that you expected to enjoy after purchase that helped make the property title of the seller you bought from marketable to you.

Financing and insurance are two of the fundamental. Not so many years back Wells Fargo offered equity loans, conforming loans sold to Fannie/Freddie were available, and some have direct insurance with firms like State Farm.

One by one these have been taken away.

Do not confuse marketability and merchantablity.

When the lava was actively flowing down the center of Royal Gardens, it was still possible to buy and sell property. That is merchantablity.

As a lender I knew this. When people asked for a loan to buy property there I said no. However, now that the flow for the forseeable furniture is headed North, I would be, legally obligated to submit the application.

[Obie]

As a lender, you caused the tragedy that may yet happen !!

Bettah you stay away !

[pbmaise]

Kapohocat,

A California case appears to be source of rumors.

The Kwoks never purchased the property. Instead their LLC did. They then sold the property from the LLC and moved it into their revocable living Trust. They
dissolved the LLC. They then filed a claim using living trust as claimant.

It is possible to buy as a person, move into RLT, then back into person.

A website I checked said there have been cases of denial for someone doing this. However, it failed to say who and where. Further, I don't see it endorsed as a reason for denial by a Court.

Mind you, some busy judge somewhere has no doubt not understood that a living trust that revokes back into the same persons that purchased the policy is one in the same.

My experience is a lawyer was running around scaremongering people that they could be sued personally if someone fell on their rental property. So they sought protection by hiding under the RLT.

Any reason to bamboozle you into thinking your claim is invalid is the job of that insurance adjuster

[pbmaise]

Obie
Yes, people specifically depended upon me when making their election to buy in Lava Zones 1&2. I wasn't the only mortgage loan officer capable of closing loans for people in these areas.

I do seem to be the only one still here for my clients and still fighting for them.

The sheer gall I have to demand that HVO, CD, and the legislature see things my way is amazing. My way is only one way. Red-lining is illegal.

There is nothing in the forseeable future to justify destroying the marketability of property titles far and wide.

However, again you are baiting me in return.

All I am trying to establish in this thread is an understanding that the Title Insurance we required every homeowner to buy is a living document.

[pbmaise]

Examine your Title policy and look for a paragraph like this:

CONTINUATION OF INSURANCE.
The coverage of this policy shall continue in force as of Date of Policy in favor of an insured only so long as the Insured retains an interest in the Collateral, or only so long as the Insured shall have liability by reason of warranties made by the Insured in any transfer or conveyance of the Collateral.

Question, based on reading this is title insurance a dead document or a living one providing continuing coverages?

[TomK]

What does "Why marketability of title insurance is forward" actually mean? It seems to me a helicoptering term that doesn't factor in new synergies in an era that accepts aggressive mediocrity. It's just leveraging the matrix and a factor that needs a multi-faceted template to enable a stable but innovative road map for future blue-sky thinking.

Sorry, it's just the way I feel right now.