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In the PressAlbuquerque
Journal Editorial - June 15, 2004 The first legal battle over an obscure change in title insurance laws raises the question: Was the Legislature trying to protect property buyers or title companies? If you have a mortgage, you've probably paid for title insurance - a policy that protects the lender's interest in the property should anyone challenge the title claim. At some point, a title search was conducted to uncover liens, restrictions, encroachments or encumbrances that could affect the property. If the search is faulty, and the buyer runs into expensive, unforeseen problems as a result, the company that conducted the search would be liable, right? Not necessarily. A provision buried deep in the Title Guaranty Act, sponsored by Sen. Manny Aragon, D-Albuquerque, and enacted in 1999, prevents policyholders from suing for defective title searches. District Judge James Hall, the first judge to rule in a case involving the modification, reluctantly threw out a buyer's claim against a title company. Hall said the claim likely would have been valid before the revision. The title search turned up city building height restrictions on the property in question, but a typist omitted the information. The buyers found out about the restrictions after substantially completing construction of a two-story building - what turned out to be a $140,000 problem. Santa Fe Attorney Eric Sedillo Jeffries, who represents the property buyer - Tierra Concepts Inc., said the case casts doubt on the value of insurance. So does the 1999 statistic that title insurance companies paid out $4 in claims on every $100 in premiums collected in New Mexico. Auto and home insurance companies pay out $85 or more for every $100 in premiums. The Legislature should revisit the 1999 revision, and put back in some of the value it stripped out. Companies that do title searches should be accountable for the accuracy of their work. If you wish to know more about this issue visit our website at www.enforeabletitleinsurance.com to learn more, write to your legislator or sign our petition. |
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