Does title insurance protect the buyer of a foreclosed proprty from a second mortgage against the home?

Answer 1

A title search or examination will uncover any judgments, mortgages, taxes, assessments, charges, or other liens which may encumber or adversely affect the title of a property. In particular, a historical search or examination will be made of the prior owners of the property. Once the examiner or searcher has completed this process, the title company will compile the information and prepare a Title Commitment that reports on the status of title. The Commitment will list as exceptions or exclusions to title all encumbrances, liens, or other adverse matters that were found. This process is completed before you purchase the property. If these matters are not cleared up or resolved by the end of the closing or settlement, the matters will be excepted from the coverage provided by the title policy, and the policy will not cover any loss caused by or arising from the excepted matters.

Unless the title company takes a specific exception in the title policy, the policy will protect you from having a financial loss because of, or arising from matters such as someone else owning your home, a forgery or fraud in the prior title, lack of legal access to the property, or the existence of undisclosed liens such as taxes, mortgages, assessments or charges, as well as many other matters which affect the ownership of the property.