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[quote=Anonymous]I agree with a lot of Frank's blogs, but he has it wrong on title insurance.

The lender's policy only protects the lender.  It is an indemnity policy, so it only comes into effect when they suffer a loss.  Follow it through -- you go to sell your home, get a great contract, the title attorney finds out the the new construction home you bought was actually built on a County easement for a water maintenance faciity that isn't there, but the County has the right to build one in the future.  So you certainly have a title problem.  The lender only gets the opportunity to make a claim when they suffer a loss.  So basically, you have to stop paying them and your credit goes down the toilet, and they foreclose on you.  Then the lender can make a title claim for the amount left on your loan.  You lose the contract on your house, you spend tens of thousands trying to sue the builder who is now bankrupt after the market downturn (even though you have a great case, the builder doesn't have any money to give you even if you win).  But gosh, saving that $600 at settlement was totally worth it.

I spend a lot on Homeowner's insurance every year, but I still don't hope my house catches on fire.[/quote]

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