For the last half century or so, lenders have relied upon policies of title insurance to insure the lender and the lender's mortgage and deed of trust against loss or damage occasioned by a defect in the title which the lender may be unaware of, despite the title insurer's research and the issuance of a preliminary title report.

However, a series of recent California appellate decisions, combined with a surprisingly strong title insurance lobby in Sacramento, have dramatically weakened the protections afforded by policies of title insurance. Many lenders are in for a significant surprise when they learn that their policy does not protect their title to the extent previously thought.

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