are deemed to be the responsibility of the individual cardholder and therefore, when it came to repossessing the property, the wife had a case to say that she didn’t benefit from the loan and therefore wouldn’t be moving out. These types of circumstances can lead to protracted and costly repossession actions; however even a simple mistake by the borrower in completing the paperwork can lead to problems and ultimately a valid claim under a title insurance policy. While fraud by borrower, solicitor or
broker is increasingly being identified, few realise that title insurance covers this major risk category.
In the past, I think it would be true to say that the key selling point for title insurance amongst lenders and brokers alike was its ability to simplify and speed up transactions. Its ‘downstream’ security benefit was pretty much ignored. Over recent years, however, as the economy has become more and more strained, we have seen an assertion of three principle risk factors:
repossessions, mortgage fraud and solicitor negligence. Sadly, none of these show any signs of abating and the situation will probably get worse before it gets better.
It often takes a crisis to prompt the adoption of practices which can provide benefits reaching far beyond the immediate need. It took the Second World War to force the mass production of penicillin. When it comes to total war on the financial front, it could be that practices and products which have previously been atypical, being brought into the mainstream. Measures adopted in austerity could well prove their benefits long beyond the duration of the downturn. Title insurance could be a prime example. If I live to get my telegram from King William (I plan on outliving Her Majesty at the very least!), could we have reached the point where every single property in the UK is title insured at the point of purchase? The impact of the recession itself is deeper than any other, I would argue. It has led to wide-sweeping reviews of
the actions of the financial community and those who regulate it. Solvency, capital adequacy and risk management all vie for the top spot on board meeting agendas. Title insurance is well suited as a risk management tool as organisations move to comply with Basel II rules. Adding a further layer of security to riskier tranches of business through the application of title insurance can assist in reducing the level of capital that must be set aside. This can help a building society, for example, maximise its efficiency of capital utilisation and thus generate greater returns in terms of performance.
Not to capitalise on all the benefits that title insurance can offer simply doesn’t make sense. I guess I would say that in my line of business. Given the fact, however, that its fundamental purpose is to help with the security, simplicity and speed of property transactions whatever the economic climate and whether you’re a lender, an intermediary or a solicitor, it’s a common sense tool for all to use. n
mortgage introduCer SEPTEMBER 2010 43
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52