Types of Evidence of Title for Homeowners and Lenders

What type of evidence of title provides recourse if title defects are later discovered?

Option 1: Abstract of title

Option 2: Attorney's opinion

Option 3: Certificate of title

Option 4: Title insurance

Final answer: Title insurance

Answer:

Title insurance is the type of evidence of title that provides recourse if title defects are discovered later on.

When it comes to protecting homeowners and lenders against potential title defects, title insurance plays a crucial role. Title insurance is a type of insurance policy that offers financial protection in case any issues related to the property's title surface in the future.

Unlike other types of evidence of title such as abstract of title, attorney's opinion, or certificate of title, title insurance specifically covers losses due to defects in the title. These defects can include unpaid debts from previous owners, forgery, or undisclosed heirs who could claim ownership of the property.

If a title defect is discovered after the purchase of a property, the homeowner or lender can rely on the title insurance policy to file a claim and seek recourse. This provides peace of mind and financial protection in case legal actions need to be taken to resolve the title issues.

Overall, title insurance is an essential safeguard for homeowners and lenders, ensuring that they are protected from unforeseen title defects that could potentially jeopardize their ownership rights or financial investments.