Professional liability insurance policies for title companies generally require the insurer to provide a legal defense for civil lawsuits, but contain exclusions for allegations of intentionally wrongful acts.  However, depending on the wording of the policy, the insurer may still be on the hook to provide a defense even when a lawsuit contains allegations of wrongful acts, as seen in a recent Maryland case.

Pending home sales were essentially unchanged in January, according to the National Association of Realtors. Monthly gains in the South and Northeast were offset by declines in the West and Midwest.  The index is down 9% from its January 2013 level and is near its lowest point since November, 2011.

A title company failed to get some of its work done in preparation for a closing, and the closing was pushed out over a weekend to the next Monday.  That next Monday, a third party holding most of the money for the buyer's purchase went bankrupt.  The funds were frozen by the bankruptcy court and the buyer could not close the deal.  As a result of not being able to complete the purchase, the buyer suffered a million dollars in losses.  Was the title company liable for those losses?

Title underwriters are usually interested in limiting their liability for their agents' actions to only the agent's actions involved in issuing title insurance.  But in a recent case, an underwriter took the rather odd position of arguing that its legal liability extended to an agent's escrow activities.

A oil and gas company paid a property owner a six-figure signing bonus for a mineral rights lease despite the fact that the property owners told them that they did not own the mineral rights.  When it turned out that the property owner indeed did not own the mineral rights, a court ruled that the property owners could still keep the money.

A developer signed a borrower affidavit stating that all liens on a property had been paid off.  But unbeknown to the developer, his partner, in cahoots with the title insurer's agent, was concealing the fact that a $4 million lien was not paid off.  The title insurer had to pay off the full lien, and the partner went to prison.  Could the title insurer recover some of its loss from the innocent developer, based on the misrepresentation in the borrower affidavit?

To the horror of a bank, a foreclosure on a lien for a few hundred dollars was ruled by a court to have extinguished the first mortgage on the property-- even though the debt had become delinquent years after the first mortgage was properly recorded.