For one investor, the answer to this question crept in only after the deal was done.
It all started with the cash purchase of 27 acres of unimproved land through a title company. The property was deeded into their LLC. The transaction appeared complete.
Then they received a call from law enforcement.
The person who sold the land was not the true owner.
The real owners uncovered the fraudulent sale and reported it. Investigators determined the sale was part of a larger real estate scam, leaving the buyer in a troubling position: they might not legally own the land they just paid for.
The deal had been completed remotely, which makes it easier for fraud to go undetected.
As the investigation unfolded, another red flag surfaced. The notary listed on the deed confirmed she never notarized the document—her credentials had been stolen months earlier.
The deed was fraudulent. The buyer had unknowingly bought land from someone impersonating the true owner.
Fortunately, the buyer had obtained an Owner's Policy of Title Insurance from First American.
Once the fraud was confirmed, First American paid the loss as covered by the title insurance policy. The insured received a payout for the insured amount, subject to the terms, conditions, and coverage of the policy.
What could have been a significant financial loss to the new owner was addressed through the protections afforded in the title insurance policy.
Vacant land is a common target for fraud. Remote transactions, stolen identity, and fake notarizations are increasingly used in scams.
Without an Owner's Policy, the buyer could have faced the risk of losing their entire investment.
Ownership risks aren't always visible at closing.
A First American Owner's Policy helps protect your investment against off record risks due to fraud, forgery and other hidden title issues as provided by the terms and conditions of the title insurance policy—so you're not facing those challenges alone.
As with any insurance contract, the insuring provisions express the coverage afforded by the title insurance policy and there are exceptions, exclusions and conditions to coverage that limit or narrow the coverage afforded by the policy. Also, some coverage may not be available in a particular area or transaction due to legal, regulatory, or underwriting considerations.
Please contact a First American representative for further information. The services described above are typical basic services. The services provided to you may be different due to the specifics of your transaction or the location of the real property involved.
