Refinance deals carry higher title insurance risks

"The study also shows fraud and forgery claims on refinances are far more expensive, averaging about $207,000, which is nearly seven times the cost of other claim types. Defense expenses add significantly to the burden. For refinances, defending a fraud or forgery claim averages nearly $70,000, and defense costs represent more than one-third of total claim expenses across most categories."

"The findings highlight a higher risk in refinance deals, where about 40% of losses tied to refinance claims stem from issues that cannot be detected in a public records search, underscoring the limits of routine title checks. This study underscores that refinances are by no means risk-free, said ALTA CEO Chris Morton. Fraud and forgery, which cannot be detected through a public records search, are actually more common and more costly in refinance transactions compared to purchase transactions."

Fraud and forgery claims on refinances average about $207,000, nearly seven times the cost of other claim types. Defense expenses add significantly to total losses; defending a fraud or forgery claim on a refinance averages nearly $70,000, and defense costs constitute more than one-third of claim expenses across most categories. Refinance deals carry higher undetectable risks, with about 40% of losses tied to refinance claims stemming from issues not discoverable in a public records search, revealing limits of routine title checks. Title professionals and title insurance use technology and expertise to protect homeowners and lenders and mitigate catastrophic financial losses.

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