How can there be a title defect if the title has been searched and a loan policy issued?

Title insurance is issued after careful examination of public records pertaining to the property and/or its owners. But even the most thorough search by the best and most experienced title examiners cannot guarantee that there are no title hazards present. This is because there are many different kinds of potential title problems that cannot be disclosed or discovered through search of public records. Examples would include:

  • False impersonation of the true owner of the property
  • Forged deeds, releases or wills
  • Undisclosed or missing heirs
  • Instruments executed under invalid or expired power of attorney
  • Mistakes in recording legal documents
  • Misinterpretations of wills
  • Deeds by persons of unsound mind
  • Deeds by minors
  • Deeds by persons supposedly single, but in fact married
  • Liens for unpaid estate, inheritance, income or gift taxes
  • Fraud