The home was a "steal" when you bought it four years ago and it should have been! The home needed a lot of work! After four years of constant work, your older, beautiful home, in an up-and-coming neighborhood, is perfect. It is finally time to kick back on your wrap-around front porch, watch the kids riding their bikes, and listen to the birds in the mature trees that line your street. This is the summer you can finally enjoy the rewards of the money and time spent to make that dream home you have always wanted...until a knock at the door might cause your dream to become a nightmare. By the way, all of these have happened at least at one time. What is the saying about truth being stranger than fiction?
1. Long-lost relative appears. I swear this is not a plug for title insurances companies, but sometimes that stuff can sure come in handy! Let's say, for example, a court decides that a long-lost relative who was traveling in Europe for 20 years is in fact the house's true owner. Seriously?! "I thought I owned this home and look at all the work I did!" At least an Owner's Policy will cover your financial losses (though you might still have to move out of the house).
2. Someone Comes Back From the Dead. Nope. I am not talking about a zombie apocalypse. Usually, after about seven years of not making an appearance and no indication that person is still alive, a court may declare a person "legally dead." Let's sell the house, get rid of stuff and move on, right? Well, guess who showed back up and was NOT dead. Oops! A court might find the newly "undeparted" the true owner of the home and you are out but at least with your insurance, your expenses may be covered.
3. Misspelled names. True story - growing up, until I was about 16 years old, I thought my legal first name was spelled with a "C" since my dad had always spelled it that way. Once I got my first job working at Dairy Queen (I was pretty popular with my friends who came by to see me) I learned that it was actually spelled with a "K." Paperwork buried for years under a misspelled name might reveal a claim concerning the property.
4. Red Rum. Murder does not have a statute of limitations. Sometimes your hear stories of people being arrested 30 years after a murder, charged, and sent to jail. If you murder someone, you cannot benefit from your act. For example, a wife is found guilty of murdering her husband 5 years ago. In the meantime, she sold the house that was in his name but she had gotten via his will. The relatives/beneficiaries may be able to go back in and take back the house.
5. Your Neighbor Doesn't Make Your Mortgage Payment. What? True story regarding a case that is happening right now. Let's say 28 years ago you bought a home and started paying the insurance and mortgage. Your house is now paid off so why are you getting notice that your home is about to be up in a foreclosure sale? Ends up you don't own your home. The legal description was for your neighbor's house, which you now own, and not your current home. Additionally, your insurance is ALSO on your neighbor's house and the neighbor has stopped making all payments on yours. Be extra careful on those legal descriptions!