Title Insurance Company

Title insurance companies offer both the borrower and the lender assurance of a clean title, and if there are unforeseen problems within the title chain on a piece of property. The title insurance company will pay the lender or the borrower for any legal inconvenience. In most states, such insurance is mandatory before a property transfer can take place at the loan closing.

These mortgage related businesses are responsible for thoroughly researching a property's ownership history before granting a mortgage policy. Twelve months worth of premiums are required up front before closing and an additional two months of prepaid premiums to be held in a borrower's escrow account. This up front payment is primarily done to assure the lender that the policy is valid and remains valid throughout the life of the loan.

Borrowers interested in changing title insurance companies must first receive approval from their lender. The lender has the ability to accept or decline the change. Even after the loan is paid off, it is wise for a homeowner to keep a policy with a title insurance company. The guaranteed coverage will extend for multiple owners down the line, even when the home is sold and new insurers take over underwriting that same piece of property.

If there is a lien on the property that was incurred while a homeowner lived in the house, or was caused by a previous homeowner, the title insurance companies will take responsibility and either pay off the debt, or fix the property to make it sellable for full value. These agencies work together to figure out the time frame of a potential lien and act accordingly to correct it. Then the policy that was paid for by each of the homeowners over the years works out the situation to legally fix the problem on behalf of the lender, owner and any other potential buyers.

Some Christians are apprehensive about the purchase of such policies assuming that obtaining legal protection results in a lack of faith in God's ability to protect and provide for them. While the Bible does not address the issue of purchasing insurance from a title insurance company, it does address the issue of obedience to a nation's laws and the leaders elected to create them. The law allows lenders to require the purchase of insurance from any approved title insurance companies. "Let every soul be subject unto the higher powers. For there is no power but of God: the powers that be are ordained of God." (Romans 13:1)


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