Does title insurance cover equity?

[jvogel]

What is the name of your state? California
I bought my home for $250,000. It's now worth about $800,000. If a title problem is discovered when I sell, can the claimant recover any of my equity? Does the original title policy cover only $250,000? For instance, if someone shows up who rightfully owned half the house at the time I bought the house and was never compensated, is that person now entitled to half of $800,000? If so, who pays?

[HomeGuru]

Originally Posted by jvogel

What is the name of your state? California
I bought my home for $250,000. It's now worth about $800,000. If a title problem is discovered when I sell, can the claimant recover any of my equity? Does the original title policy cover only $250,000? For instance, if someone shows up who rightfully owned half the house at the time I bought the house and was never compensated, is that person now entitled to half of $800,000? If so, who pays?

**A: generally the title company pays but read your title policy.

[jvogel]

Thanks. Can the title company or any other liable party be liable for more than the original $250,000 price, assuming the claim did not originate after the sale closing date?

[HomeGuru]

Originally Posted by jvogel

Thanks. Can the title company or any other liable party be liable for more than the original $250,000 price, assuming the claim did not originate after the sale closing date?

**A: what exactly is your point and situation?

[nextwife]

For COVERED title matters, you would be insured as of the "effective date". you need to read YOUR owners policy to see if yours included the inflation clause. We have no way of knowing what form policy you were issued.

And, unless there is a FULL failure of title, they may not even be obligated for the full coverage amount- whatever that may be. If there is a partial title failure, they have other options to attempt to correct the defect. If there is a "missed" open mortgage, they can pay if off and get it satisfied, for example.

Only a complete title failure would necessarily see a full payout

[HomeGuru]

Yes, it is indeed rare.

[jvogel]

California
To Home Guru, re "What exactly is your situation and point?": I bought for $250,000 from a divorcing couple who each had half interest. If, for instance, the husband forged the wife's signatures during escrow, and it was missed by everyone involved, and the wife discovers TODAY that her half was fraudulently sold to me, can she now claim half of the PRESENT value of the house, or only half of the value of $250,000 when the fraudulent sale took place? If she can claim half of the present value, who pays? Thanks

[HomeGuru]

Originally Posted by jvogel

California
To Home Guru, re "What exactly is your situation and point?": I bought for $250,000 from a divorcing couple who each had half interest. If, for instance, the husband forged the wife's signatures during escrow, and it was missed by everyone involved, and the wife discovers TODAY that her half was fraudulently sold to me, can she now claim half of the PRESENT value of the house, or only half of the value of $250,000 when the fraudulent sale took place? If she can claim half of the present value, who pays? Thanks

**A: I don't do "what if's". If you have a real case, state the facts and I will try to help you.