How does title insurance help protect me as the lender?

This is the penultimate question from our private lending FAQs. The question is: How does title insurance help protect me as the lender?

And here is our answer:

When people buy properties they want to make sure that they are buying the property with clear title and that there are no unknown liens or other encumbrances on the property. Title insurance is what is usually purchased to protect the buyer and any new lenders against any unknown liens or encumbrances on the property.

Should we discover, some period after we have purchased the property, that there was an unrecorded lien or encumbrance against the property, the title insurance would insure against those claims.

Until my next post,

James

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