ALTA Commends Texas AG’s Recognition that
Consumers Need Title Insurance
Title Insurance Protects Homeowners from Undisclosed Liens
March 08, 2010 06:28 PM Eastern Time
WASHINGTON--(EON: Enhanced Online News)--Responding to recent comments by Texas Attorney General
Greg Abbott about how title insurance protects homeowners, American Land Title Association President Mark
Winter applauded the attorney general for “recognizing the value title insurance provides to consumers.”
Abbott’s comments were made following the announcement that a South Texas developer had been charged with
defrauding homebuyers by selling houses that were encumbered by undisclosed liens.
“This is the perfect example of how an owner’s title insurance policy could have protected the interests of the
homebuyers,” Winter said. “For a one-time fee a title search would have uncovered any existing liens and a
homeowner’s title insurance policy would have provided the homeowners assurance their property rights were
According to Abbott, Casa Linda Homes sold residential properties encumbered by different liens, including liens for
delinquent property taxes; liens of a third-party lender; or mechanic’s lien for labor or materials used to improve the
Purchasers were not warned about the undisclosed liens by title companies, because Casa Linda did not require
homebuyers to purchase title insurance. Thus, the developer could sell the properties without homebuyers –
particularly inexperienced, first-time homebuyers – realizing that their new houses were subject to undisclosed liens.
When Casa Linda Homes subsequently failed to pay its undisclosed debt, the creditors who were owed money then
instituted foreclosure proceedings or filed lawsuits against the home buyers.
Abbott said homeowners should “make sure a title company is involved in the transaction and independently
determines who owns the property and checks for liens or outstanding debts for which the buyer could be held