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.”
Morton continued, “Title professionals and title insurance play a critical role in protecting homeowners and lenders from these risks, leveraging technology and expertise to prevent catastrophic financial losses and create certainty in the real estate market.”
