Title companies find problems in 25% of their title searches, including problems such as liens from unreleased mortgages and unpaid child support, alimony, parking tickets, taxes, and subcontractors. Other things that can also cloud the title to a home that are not so easy to detect include forged signatures in the chain of title, recording errors, title search errors, undisclosed easements, and title claims by missing heirs or ex-spouses. For this reason, title insurance is highly recommended.
Your mortgage company will require title insurance, but this policy does not protect you. It protects the mortgage company. You need your own policy. If you purchase your policy at the time you buy your home, you should receive the policy at a discount since they will have already done the search for the mortgage company policy.
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