In addition, the buyer will pay the seller for any miscellaneous expenses, such as appliances or furniture that had been previously agreed upon, the remaining oil in the oil tank, or any real estate taxes that the seller had prepaid. Owner's title insurance will cover you if a problem regarding legal ownership arises that was not discovered during the title search. The title insurance will pay lawyer fees, as well as all other costs in defending the title. Although title problems are infrequent, they could result in the loss of the house, so it can be wise to protect yourself. The bank, or lender, will likely also insist on title insurance to protect its investment at your expense.
Mortgage insurance protects the lender against the risk of nonpayment by the buyer.
This really depends upon the type of problem you find. If you find that the seller has walked off with some fixtures, which should have been included with the house, you might be able to sue to get them back, but this is a problem that might be better found in a walk through inspection just before the closing. Any major problem that the seller should have disclosed before the sale would probably justify a lawsuit, while a problem like termites, which should have been discovered in inspection, will likely leave you no recourse but to solve it yourself. Don't wait until the closing to see if there will be a problem.