Lender’s Title Insurance: When Should Courts Measure the Fair Market Value of Property Affected by a Title Defect?*

By:  Andy Stone

Title insurance is designed to pay for damages caused by any defects to title that the title company should have discovered but did not.  Lender’s title insurance protects lenders who lose money due to a title defect, which is distinguished from an owner’s policy that protects the property owners.  How to calculate a lender’s damages under a title insurance policy is an issue that courts have struggled to address in a consistent manner.  Generally, courts are in agreement about when a lender suffers damages, which occurs after the borrower defaults and the security for the mortgage proves inadequate. … Read More »

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