Real Estate News

ALTA: No title insurance for 20 percent of homebuyers

Published: 23 Jun 2017

According to the American Land Title Association, roughly a fifth of Americans purchasing homes aren't taking the important step of securing title insurance. In a June 19 statement, the source said that the amount of buyers who forego this insurance was "approximately 20 percent" and listed the numerous factors that could threaten a homeowner without title protection.

These included errors, challenges to the title or tax liens and easements not previously disclosed. The statement did not list the source of this statistic. Despite this somewhat discouraging data, another source claims that the title insurance industry is still going strong for the current year, based on past performance.

Research company Fitch Ratings is the source of this data, and said that the title insurance industry is "stable" and "strongly capitalized." It also acknowledged the link between title insurance purchase activity and shifts in mortgage rates, which seems especially important given the potential for more rate hikes before the end of the year, depending on the actions of the Federal Reserve.

In the statement, Fitch Ratings Director Gerry Glombicki went into detail about what the near future could hold for insurance providers in particular, as current housing trends continue to play themselves out across the coming months.

"Higher interest rates and employment levels are the top risks for title insurers in 2017; however, an uptick in business investment and consumer confidence could benefit title insurers," Glombicki said.

Most of ALTA's other recent press releases have concerned its own organizational setup or various suggestions and updates it has made. In April it announced two new updates to supplemental best practice materials, and earlier than that it issued a series of recommendations to the National Association of Secretaries of State regarding electronic notarization.