A few years ago, the American Land Title Association foolishly invited me to speak at their national convention. Don't tell anyone, but I learned far more from those title insurers than they learned from me. To my surprise, I learned the biggest cause of title insurance policy losses are forged signatures on deeds and other title documents. Equally important, I was told even the world's greatest title expert can't detect most forged signatures on deeds. Many deed forgeries, for example, involve one spouse forging the signature of the other or a partner forging the signature of an absent partner.
Some states now require thumb prints to minimize forged signatures.
But forgeries continue to be the No. 1 cause of title insurance losses. As mentioned earlier, mortgage lenders usually require title insurance policies on their loans. However, the lender's title insurance will not protect the borrower from losing his or her equity due to a title risk, such as a forged signature in the chain of title. For a few dollars more, however, at the time of property purchase, buyers can get an owner's title policy. As the mortgage balance declines, and the owner's equity grows, the owner's title policy offers increasing coverage and becomes more valuable.