OneTitle National Guaranty Placed in Liquidation!
When Hallmark Abstract Service speaks to homebuyers, real estate agents, mortgage brokers and real estate attorneys, one of the key points that we stress is that the underwriter being used for the title insurance policy is critical, and needs to be one of the strongest and best capitalized available.
And sometimes, people will ask why? Well, the OneTitle liquidation is the perfect example for the reason why!
First, a brief overview of the reasons why title insurance in New York is not a ‘commodity product’.
From the article ‘Buying a Home in New York? What You Don’t Know Can Hurt (Cost) You!’, the following points are made…
Did you know that in New York, title insurance is not all the same:
- Title Bills Will Vary From Firm To Firm – This variation can be as much as $1,000 or more,
- Know (and approve) Who The Title Insurance Underwriter Is,
- Know The Title Claims Experience Of The Firm Chosen To Provide The Title Insurance Policy,
- Is There An Affiliated Business Arrangement Between The Title Insurance Provider And Any Of The Other Players In Your Transaction (i.e. attorney or real estate broker),
- You As The Consumer Have The Right To Choose The Title Insurance Provider!
OneTitle was a ‘discount’ title insurer that was never well capitalized and never gained traction. But that said, there were homebuyers who insisted on using them and who now have a serious issue.
The bottom line is that for what may very well be the largest financial investment of someones life, why save a few bucks on the very title insurance that ensures clean and clear title to the property, and that will cover you in the event that some unknowable issue were ever to arise?
The Order
On October 6, 2020, an order filed by the Supreme Court of the State of New York has granted a motion placing OneTitle National Guarantee into liquidation. The Superintendent of The Department of Financial Services (DFS) and her successors were named in the order as liquidator.
Pursuant to the order, all existing insurance policies issued by OneTitle shall terminate at 12:01 A.M. local time 30 days after the filing of the order.
What happens next? The Department of Financial Services will be mailing letters to homeowners and lenders who acquired title policies from OneTitle. In a letter that no homeowner or banker would ever want to receive, they will be instructed that their policies will be effectively canceled on November 5, 2020.
Does a homeowner have any options? They do, but at the cost of purchasing a new title insurance policy, “Owner in Possession”, which would afford them the same coverage as a standard policy.
Questions? Contact Hallmark Abstract Service at info@hallmarkabstractllc.com or (646) 741-6101.
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