An American Land Title Association (ALTA) policy is a title insurance policy that protects against losses that may be incurred in transferring title through the purchase of real estate.
An American Land Title Association (ALTA) policy is a title insurance policy that protects against losses that may be incurred in transferring title through the purchase of real estate. Helps prevent and protect against land title issues such as forged deeds, unregistered mechanical encumbrances, owner impersonation, easements, water rights, boundary line disputes, mining claims, life property, encroachment, contested wills and other assessments and encumbrances. The most basic purpose of a HIGH policy is to ensure that the lender has a valid guarantee that is enforceable.
In the early United States, land was purchased and transferred between owners with the help of carriers. These professionals searched public documents for relevant information about the property being sold and helped to register the necessary deeds. In 1876, the first securities insurer was established by a group of Philadelphia-based carriers to protect creditors from securities fraud and errors. In 1907, the American Land Title Association was formed in an effort to make the industry more agile and professional, as well as safer for lenders, sellers, and buyers.
A HIGH policy is required by most institutional lenders to protect their interests against losses. This policy usually covers the entire loan amount for the entire duration of the loan. A securities company will first do a detailed search for a property’s title and, if it is clear, an ALTA policy will be issued. Just as a traditional insurer will not issue flood insurance for a home on a floodplain, a HIGH policy will not be issued for a property with obvious title issues.
Twenty-five percent of properties have title issues that must be resolved before a HIGH policy can be issued. Policies vary as to who pays for the title insurance, depending on where and to whom the policy is issued. This type of policy follows local and state property laws because title matters are generally not regulated by the federal government. There are six types of ALTA policy: from the creditor, to the bank or institution that is lending the money to buy the property; Lender’s lease; Owner, for whom the property is purchased; Owner leasing ; Residential ; and Construction Loan. For those who sell or buy a property, it is advisable to find a securities company that is a member of ALTA.