What Do I Do if Title Insurance Is Not Approved for a House?

Title insurance protects you and the lender on your home from claims against the property resulting from such issues as contractor’s liens, unpaid taxes or property disputes. You normally pay for title insurance when the escrow on your home closes, and it is a one-time, rather than a recurring, cost. If title insurance is not approved for your house, it indicates a problem with the title and normally the lender will stop the loan process until the issue is resolved.

Step 1

Identify the reasons that title insurance was not approved for your house. Such problems are the result of issues with the title on the home, and each one must be addressed before the sale can close.

Step 2

Work with your real estate agent and the title insurance company to resolve the title problem. Title insurance companies routinely fix all kinds of title problems, and while they are not required to insure your home’s title, it is often to their benefit to do so if the problem can be corrected.

Step 3

Contact the appropriate parties that are affecting your title. This could be heirs to the property who just learned of its existence, a mechanic who worked on a previous owner’s vehicle or the tax office that has filed a lien for unpaid taxes. Find out what it would take to resolve the problem and get it cleared from the title.

Step 4

Verify that all paperwork is correct. Title problems can result from something as simple as a typographical error but can also be the result of a forgery or an invalid signer on a deed. As with other issues, these must be cleared before you can get title insurance. You may need to get a title reissued or to reach a financial agreement with someone who has rights to the property or is holding a lien. Be sure to get the proper signatures on all documents once you’ve reached a resolution; the title company can help you make sure you have everything done properly.

Step 5

Apply for title insurance again once the problems are resolved. At this point there should be no reason that you cannot get title insurance, and it should be approved so that escrow can proceed.

Items you will need

  • Title insurance report and reason for denial

Tips

  • If a title problem is bad enough that the title company doesn’t want to deal with it, make sure you are prepared for the time and money it could cost you to correct the situation.

Warnings

  • If your home only has lender’s title insurance, and not owner’s, you are not protected in the event that a problem arises with the title. Make sure your home has both types.
  • Title insurance protects you from unknown issues prior to the close of escrow on your home, but it does not insure against errors you have made or problems you have caused.

Photo Credits

  • Sold Home For Sale Sign in Front of New House. image by Andy Dean from Fotolia.com

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