Title insurance set to soar
Posted by: Titlesolv

London & European today forecast a surge in the uptake of title insurance

policies by prime lenders, in particular building societies.

 

Christian Bearman, Director at London & European which is a leading provider of

insurance services and solutions designed to enhance the speed, simplicity and security

of property transactions, explains: “We’ve experienced a 116 per cent increase over the

past year in inquiries from this community as its focus has shifted from growth or

market share to risk. Since the credit crisis began just over a year ago, it has become

clear that the prime market has recognised the value that title insurance can deliver in

adding an extra layer of security to their mortgage portfolios. What has been an

accepted risk management tool amongst non-standard lenders for several years is now

fast gaining equal status amongst building societies and other prime lenders.”

 

Bearman points out the prime lending community faces three major risk categories

which are rising exponentially in the current climate: repossessions, mortgage fraud, and

solicitor negligence.

 

Repossessions continue to rise and with 25% of all UK property transactions having a

title defect which could make a property unsalable, the risk to a building society or high

street lender of not being able to recoup its investment in full is significant. Title

insurance offers an effective risk management tool as it covers losses against existing

and historical title problems.

 

Few realise, however, that title insurance also covers fraud and forgery by a borrower or

solicitor – an area of growing importance. A recent survey by Nationwide stated that

mortgage fraud has become endemic and the Solicitors Regulation Authority, the legal

regulator in England and Wales, is investigating as many as 60 lawyers for alleged

mortgage fraud after complaints more than tripled in three years.

 

Bearman concludes: “Building societies and high street lenders are in unparalleled

territory in terms of risk and liquidity challenges. Title insurance offers an increasingly

attractive proposition in helping them manage their risk exposure more effectively both

now and in the future.”

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