Title insurance makes the American dream a reality.
Without title insurance, far fewer Americans would own their homes.
With or without a white picket fence, owning a home has long been part of the American Dream, and title insurance has helped make that dream a reality. Since its emergence in the late 1800s, title insurance has become a fundamental part of homeownership in the United States.
A homebuyer obtains a title insurance policy during the closing process, and it takes effect after the buyer assumes possession of the home. Unlike other types of insurance that involve ongoing payments, a title insurance policy requires just one payment. That one payment protects the buyer for as long as he/she owns the home. If a financial claim against the property arises any time after the purchase, title insurance pays for the claim — enabling the policyholder to retain ownership of the home.
Title insurance protects mortgage lenders as well as homebuyers. Clear transfer of title and legal guarantee of ownership reduces the inherent financial risk of each mortgage loan. In addition, the assurance of clear title enables lenders to "securitize" their mortgages by selling them to Wall Street investors. Securitization enables lenders to retain cash and, thus, make a larger volume of loans at lower interest rates than without securitization.
Title insurance and securitization are uniquely U.S. innovations that have contributed to our country's high rate of homeownership. By reducing the risk of mortgage loans, title insurance enables lenders to offer longer-term property mortgages with lower interest rates. These buyer-friendly financing opportunities make it possible for more people to own their own homes. In countries that do not have title guaranty, mortgages come with much higher risk and, therefore, higher interest rates.
Stewart Information Services Corporation's overriding philosophy is that private property ownership contributes to social and economic stability. Since 1893, Stewart has dedicated itself to helping millions of U.S. residents realize the American Dream. In so doing, Stewart has helped the United States become the world leader in homeownership.