The purpose of title insurance is to protect the Lender and the Buyer against loss from mistakes which could have occurred in the abstract of the title and claims which cannot be discovered by an examination of public records.
Such mistakes include:
- Fraudulent representations
- Undisclosed or missing heirs
- Invalid divorces
- False affidavits
- Liens involving judgments and mechanics
- Unpaid taxes
- Mistakes in recordings and title searches
- Defective foreclosures or tax sales
- Deeds executed under a defective power of attorney
- Clerical errors in the land records
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