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CATIC Title Insurance -The Better Choice
You may be hearing about a product based upon an attorney’s Opinion or Certificate of Title (an “Opinion”). The purpose of this memo is to explain why title insurance is clearly the better option.
A CATIC Policy provides substantially more coverage than an Opinion
Standard or Expanded CATIC Loan Policies cover loss resulting from:
- unrecorded liens and other matters that cannot be discovered in a public records search;
- title defects caused by fraud, forgery, duress or impersonation, improper execution of documents or defective judicial proceedings; and, arguably the most important for a lender or investor
- the invalidity or unenforceability of the Insured Mortgage.
Opinion-based products do not.
Under a Standard or Expanded CATIC Loan Policy, CATIC will also pay the costs, attorneys’ fees, and expenses incurred in defense of any matter or risk insured against by the policy.
Opinion-based products do not include this coverage.
A CATIC Policy provides more reliable protection than an Opinion
To be reimbursed for loss under an Opinion-based product, a lender must:
- Foreclose upon and sell the property; or
- Exhaust efforts to collect the mortgage balance, and
- Comply with a stringent and convoluted claims process where the lender notifies the attorney who issued the Opinion (the provider) who then has to give written notice to a liability insurer before a strict deadline.
In addition, if the insured provider fails to renew the policy, the insurer exercises its right to cancel, or the liability under the Opinion has expired by operation of state law, a lender’s subsequent claim will not be covered.
By contrast, a claim made under a CATIC Policy is made directly to the title insurer; and
A Loan Title Insurance Policy remains in effect for as long as the Insured Mortgage exists, or so long as the Insured retains an interest. After payment of a one-time premium and issuance of the title policy, there are no required renewals and the title insurer cannot cancel the policy.
Lenders need to make informed decisions rather than settling for the inferior choice. Remember that CATIC title insurance offers the most complete protection, the most reliable coverage and the best value.
For additional resources, visit the ALTA website.
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