Calculation to insure the title of the transaction Sberbank

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If a property is purchased on the secondary market, the financial institution may require the title. Such a prescription causes bewilderment among most citizens. Few people have any idea what title insurance is. Meanwhile, the service is actively used for mortgages. If a bank asks a customer to take advantage of an offer, the first step is to understand what mortgage title insurance is and when purchasing the policy is required.

What is title insurance for a mortgage?

Title – ownership of property, confirmed by documents. If we are talking about buying real estate, such paper is an extract from the Unified State Register or a certificate of registration of ownership.

Attention! If you have any questions, you can chat for free with a lawyer at the bottom of the screen or call Moscow; Saint Petersburg; Free call for all of Russia.

The definition of title insurance follows from the above concept. It is understood as protection against the risk of loss of property rights to housing.

The fact is that from time to time situations arise when, after purchasing real estate, persons with ownership rights to the premises appear on a mortgage. They do not agree with the sale of the property and decide to sue the buyer for it. To carry out the action, a claim is prepared and filed in court. During the investigation, the specifics of the situation are clarified. If it is confirmed that the citizen’s claim is legitimate, the transaction may be declared invalid. As a result, the purchased apartment will have to be returned.

Attention

If the borrower finds himself in such a situation, he will have to repay the mortgage in any case. Additionally, the encumbrance will be removed from the premises. Such an action is unprofitable for banks. The company wants to protect itself from a full range of risks. Therefore, when purchasing secondary real estate with a mortgage, banks insist on title insurance. If the borrower refuses to complete the procedure, the company may increase the interest rate. Sometimes, failure to obtain title insurance can result in your mortgage application being rejected.

Title insurance of real estate

Ownership allows the owner to have full legal possession of the property, so they can manage the property as they see fit. However, circumstances may arise due to which the owner of the property loses it.

• if the policyholder provides incorrect information, the insurer has the right to demand that the contract be declared invalid;
• The insured's obligations include immediate notification of the emergence of disputes or the filing of a claim by third parties in court in relation to the acquired real estate and the ownership of it, as a result of which an insured event may occur.

We recommend reading: Procedure for registration and registration in Russia

Features of title insurance

If a citizen purchases real estate with a mortgage, the legal relationship between the financial institution and the borrower is regulated by Federal Law No. 102 of July 16, 1998. Article 31 states that the borrower is obliged to insure the property purchased with a mortgage. However, the regulatory legal act does not contain information regarding title protection. This means that the client independently decides whether to purchase a policy. However, banks often insist on using title insurance on mortgages. Financial institutions cannot oblige the borrower to use the service, but they have the right to decide whether to approve an application for a mortgage loan. Very often, failure to obtain title insurance will cause a mortgage application to be rejected.

For your information

Using the service protects the borrower from any pitfalls that may be encountered. The fact is that not all sellers are equally honest. Fraudsters use various tricks to save real estate and take possession of the premises. New schemes are developed periodically. Therefore, the service is beneficial not only to the bank, but also to the citizen himself.

Features of real estate title insurance in 2021

Dear readers! The article talks about typical ways to resolve legal issues, but each case is individual. If you want to find out how to solve your particular problem , contact a consultant:

Which banks require title insurance when getting a mortgage?

As stated earlier, financial institutions cannot oblige the borrower to obtain title insurance for a mortgage. According to the law (Article 31 of Federal Law 102 “On Mortgages”), a citizen has the right to purchase only a policy that includes the risks of loss or damage to property. However, in practice, many financial institutions refuse to issue a home loan without title insurance. This policy is followed by:

• Raiffeisenbank;
• DeltaCredit;
• Gazprombank;
• VTB;
• Alfa Bank.

Please note
that when contacting Sberbank there is no need to use the service. The company obliges to insure real estate, as well as life and health. The citizen retains the right to refuse the policy. In this case, only real estate insurance is acceptable. However, the overpayment on the loan will increase by one point.

What does title insurance protect against with a mortgage?

It is considered that the insured event has occurred if the transaction is declared void. This is possible in the following situations:

1. There is a fact of fraud. So, if a citizen with a fake power of attorney acted on behalf of the owner of the property, the apartment will be returned to its real owner.
2. The transaction was concluded by an incompetent, partially incompetent or insane seller. Misleading the property owner is also grounds for challenging the agreement.
3. The previous owner obtained title to the property by fraud, fraud, or threats.
4. At the time of concluding the transaction, the seller did not understand the consequences of his actions, or he was influenced through violence and threats.
5. The husband or wife entered into a transaction without obtaining the consent of the other spouse.
6. A violation of the rights of a minor has occurred. A citizen can challenge the transaction if his parents did not allocate him a share in the new home.
7. A person pays rent and sells the property without the consent of the rentee.
8. The seller inherited the property and sold it without notifying other heirs, who did not know about their new right to the apartment and could not contact a notary in a timely manner.

If in all the above cases the title was insured, the company is obliged to pay compensation to the client.

What is title insurance for real estate?

Insurance of real estate transactions and the real estate itself is generally regulated by the Civil Code of the Russian Federation, for example, Article 932 of the Civil Code of the Russian Federation. But there is no separate legislative act regulating title insurance, so insurers are guided by the requirements of basic laws.

• identity document - passport of a citizen of the Russian Federation;
• the real estate title insurance contract itself;
• a court decision indicating the deprivation of your ownership of the real estate that is the subject of the agreement.

Why can you lose your title?

There is an established belief that if the transaction is completed and the property is registered, the new owner's property is not in danger. However, the opinion is wrong. Real estate on the secondary market has changed owners at least once. Premises are often inherited or sold. As a result, the old owners may demand the apartment back. This is possible in the following cases:

• there has been a violation of the property rights of property owners, their children or heirs;
• the participant in the transaction was declared incompetent;
• there are errors in the documentation;
• the transaction was completed illegally.

Attention
In order not to encounter the above difficulties, it is recommended to familiarize yourself with the history of the purchased object in advance. However, the procedure requires familiarity with a large amount of information. It takes a lot of time even for specialists. Therefore, it is easier to obtain title insurance with a mortgage.

How can you lose ownership of real estate?

If a third party believes that its property rights have been violated, it goes to court. To do this, one of two types of claims is drawn up - vindication or to declare the transaction invalid. The documents have a number of features that you should know about in advance.

Vindication claim.

The paper is drawn up to reclaim property from someone else's illegal possession. The possibility of performing the procedure is provided for in Article 301 of the Civil Code of the Russian Federation. Only the owner of the property who has the right to it by law has the right to submit such a document. At the same time, your claims must be substantiated. In the case of a mortgage, the citizen must prove that he did not know about the existence of other owners besides the actual seller and did not receive the premises for free, but purchased it with personal and borrowed funds.

If the court finds that the actual seller did not have the right to sell the property, or if the plaintiff acted against his will, the transaction will be declared void.

Claim to declare a transaction void (invalid).

Article 166 of the Civil Code of the Russian Federation states that a transaction may be declared invalid if there is a violation of the rights of minors, heirs, owners, or fraud is proven. To defend your rights, you must go to court. To do this, you will need to prepare a classic claim. It is drawn up in accordance with the requirements of Article 131 of the Code of Civil Procedure of the Russian Federation. However, the claim will not be considered if the defendant is recognized in court as a bona fide purchaser (Resolution of the Constitutional Court of the Russian Federation of April 23, 2003). Only the first transaction with problematic real estate is subject to challenge. If a person bought an apartment after the original buyer resold it, it is necessary to file a vindication claim.

What is title insurance

The first and most important thing you should pay attention to is the presence in the insurance contract of the fact that the insured event recognized the satisfaction of the vindication claim by the court. This is what can be called the main risk in title insurance. A vindication claim is a claim to recover property from someone else’s illegal possession. If several transactions were made with the property, as a result of which it passed from one owner to another, a situation is possible when the last owner of the property will be brought a vindication claim. This will happen if during one of the transactions the rights of the owners were violated. A vindication claim can be brought even against a bona fide purchaser. The legal owner can claim the disputed property in cases where the property has been removed from possession against his will. Often, insurers' rules state that this risk is covered only if it is expressly stated in the contract. And such companies, by default, naturally do not include it in the contract.

Today, title insurance is developed almost exclusively within the framework of insurance for obtaining a mortgage loan. There are only a few insurance companies engaged in title insurance of unsecured real estate. If, in the event of an insurer’s refusal to pay for a mortgaged apartment, a bank may come to the aid of the policyholder, in the case of “voluntary” title insurance, the policyholder has to rely only on his own strength.

How is title insurance obtained?

Purchasing title insurance for a mortgage is no different than purchasing other types of policies. Experts recommend proceeding according to the following scheme:

1. Choose an insurer. You can only contact accredited organizations. The bank communicates their list to the borrower during the mortgage process.
2. Prepare documentation. You will need an identity card, a written document, documents of title to the apartment, and an appraiser's opinion. Additionally, you will need to fill out an application.
3. Contact the company and submit the documentation package. The insurer will check the papers and make a decision. The client will be advised of the exact cost of the title insurance policy for the mortgage.
4. Conclude an agreement with the insurer, provide funds and receive supporting documentation.

Types of mortgage insurance at Sberbank

• Insurance of collateral property. Includes insurance of the apartment against fires and other natural disasters, against domestic gas explosions, flooding and other accidents, against the actions of third parties that violate the laws of the Russian Federation, including vandalism and hooliganism. You can't refuse this look.
• Life and health insurance. Insured events include loss of work, temporary loss of ability to work due to illness, permanent loss of opportunity to work due to disability or injury, death of a bank client, etc. Not a mandatory type of insurance, but if you conclude an agreement and take out a life insurance policy, the mortgage rate will decrease by 0.5-1%.
• Title insurance. Covers risks in the event that a person is deprived of ownership rights to an apartment that was purchased with a mortgage. Deprivation of rights must be ordered by a court. Often, it is problematic for the borrower to prove the occurrence of an insured event for a given risk. Title insurance can be waived if desired.

How does the cost of title insurance indicate the cleanliness of the apartment?

The insurer evaluates the profitability of the proposed contract. For this purpose, the property is checked. After this, the following scenarios are possible:

• the client will be offered to purchase the premises at the market price;
• the cost will exceed the market average;
• the company will refuse to start cooperation without explaining the reasons.

Note:
In the latter case, it is recommended to find a new apartment. In the second option, there is a certain risk, but the probability of its occurrence is low.

Documents and requirements for the contract

To conclude a deal, you will need to prepare a package of documents. The list must include:

• identification;
• agreement concluded with the creditor;
• completed application;
• contract of sale;
• real estate documents (technical passport, extract from the Unified State Register of Real Estate);
• appraiser's conclusion.

If the company agrees to provide title insurance for a mortgage, an agreement will be entered into with the client. The paper records all the terms of cooperation and prescribes a list of risks from which the policy protects. Actions with the insurer are carried out strictly within the framework of the agreement. Therefore, it is important to carefully read the information reflected in the document.

Insured events with title insurance

It can be said that home title insurance is valid in almost all cases of loss of title (with the exception of fraud on the part of the borrower) and covers the following risks:

If the previous sale of real estate or its privatization is declared illegal. For example, when a transaction is made by an incapacitated person, under pressure, fraudulently, without the knowledge of the second spouse (common real estate) and in other similar cases.

• Incorrect transaction execution
• Fraud by the seller
• When selling a home, the interests of heirs or minor children are not taken into account

When the borrower's title insurance does NOT apply

Important! When purchasing title insurance, always read the contract carefully. In addition to the standard insurance cases described openly, you can find some “fine print” items that talk about restrictions. Conditions vary depending on the insurance company.

So, when does title insurance fail on a mortgage?

1. If one of the former residents has restored the right to reside in the apartment. At the same time, you do not lose your property rights, but you also cannot prevent a third party from living with you.
2. In case of force majeure - destruction of a home by natural disasters or, for example, as a result of military operations.
3. If the housing was donated to someone, was used for other purposes (for example, as a commercial premises), if the apartment is repossessed for debts.
4. Please note that title insurance is not valid after redevelopment of the apartment, which is often carried out by new owners.
5. When reading the contract, pay attention to the “retrospective coverage” clause and make sure that your policy applies even to those events that happened BEFORE the conclusion of the transaction.
6. Title insurance does not apply even if the court orders the return to both parties of everything received under the transaction. That is, the seller must return the buyer’s money for the home. It is logical that this is not an insured event, however, if the seller cannot give you the full amount at once, the court will oblige him to pay you compensation monthly (until the cost is returned in full), in this situation, returning the debt to you may take years, and the debt the mortgage remains with the buyer.

How long is the title insurance contract for?

Article 196 of the Labor Code of the Russian Federation states that the general limitation period is 3 years. It is during this period that a person has the right to go to court if information appears about the unlawful disposal of real estate from the property. Therefore, banks insist on title insurance if the previous owner owned the apartment for less than 3 years.

The contract itself is usually concluded for one year. After this, an extension of the agreement will be required if the mortgage has not yet been repaid. However, the parties may agree on a different insurance period. There is also an upper limit. The maximum term of the agreement does not exceed 10 years.

Is it possible to insure a mortgage loan taken out from Sberbank online?

Sberbank clients have the opportunity to obtain insurance not only at a branch of a financial institution, but also using the Sberbank Online Internet service. The login and password for authorization in the system can be obtained at one of the branches of the financial institution.

Attention! From November 8, 2021, mortgage insurance, payment and renewal of the policy are also available in the mobile application. It can be downloaded using Google Play or App Store.

After authorization in the Sberbank Online system, you must undergo authentication by entering a one-time code received via SMS message.

On the main page of your personal account you can see information about the user’s bank accounts and cards. A little lower is the “Payments” icon, with which you can issue a real estate mortgage insurance policy.

Advantages and disadvantages

Taking out a mortgage insurance policy with Sberbank Online has the following advantages:

1. Favorable rates. The cost of the policy depends on the remaining balance of the mortgage.
2. Simplicity of design. The process takes a few minutes.
3. Convenience. At the end of the procedure, the client receives the policy by email. A copy of the insurance contract is automatically sent to the bank in electronic form.

Disadvantages of this method:

1. Possibility of operating system failures. In this case, it is recommended to contact a technical support operator.
2. An error occurs in the operation of the service, as a result of which funds are debited from the client’s account, and the insurance policy is not received by email. In this case, an application for a refund must be submitted to the bank branch in writing. It should be noted that this problem rarely occurs and is an exception.

What applies to insurance events?

The right to ownership of real estate can only be challenged in court. If a person lays claim to the premises and has submitted a statement of claim, a summons will be sent to the new owner. In this situation, you must immediately notify the insurance company. The time frame within which the action will need to be completed is fixed in advance in the contract. The circulation period cannot be violated.

The insurer is on the borrower's side. It is important for the company that the client defends ownership rights. Therefore, experienced and well-known lawyers are usually recommended to a person. However, a person can hire his own lawyer.

IMPORTANT

It is important to carefully review the title insurance provisions of your mortgage. Sometimes it states that it is the insurance company’s lawyer who is responsible for protecting the interests of the citizen. In addition, hiring an experienced human rights defender will increase the chances of winning the case.

Additionally, it is recommended to notify the bank about the current situation. If, as a result of the proceedings, the citizen is nevertheless deprived of the right to premises, compensation will be paid. When a decision is made to impose an encumbrance on an object without a change of owner, the case is not recognized as insurable. In this situation, no compensation is paid.

Sberbank title insurance of real estate

This is the amount (no less) that needs to be insured for the apartment in the first year of the mortgage. This amount will then decrease as the mortgage is paid off. You need to insure your property for the entire duration of the mortgage, as long as you pay it off and as long as the property is pledged to the bank. At the same time, the standard contract period for insurance companies is 1 year. Therefore, every year you need to conclude a new insurance contract.

In accordance with the current legislation of the Russian Federation, property rights allow the owner to own and dispose of his real estate. However, for some legal reasons, ownership may be challenged and lost. As a result, the property will be reclaimed from the owner.

How do I get my title insurance payout?

If an insured event occurs under title insurance with a mortgage, you must proceed according to the following scheme:

1. Prepare an application and contact the insurance company. The deadline for completing the procedure is fixed in the contract.
2. Provide a package of documents along with the application. The list must include your passport and all papers demonstrating the occurrence of an insured event. It is important to include in the list the documented details of the account to which the compensation will be transferred.
3. Wait for the inspection to take place. The insurer will review all the papers, get acquainted with the current circumstances and make a verdict. If it is positive, compensation will be transferred.

If the company violates the provision of the contract by refusing to issue funds, it will be necessary to send a pre-trial claim to the insurer. In situations where there is no response, it is necessary to file a claim and go to court.

Prolongation procedure

You can renew your insurance contract for a mortgage loan with Sberbank online or in person at the office. Let's look at each renewal procedure step by step.

In-office extensions include:

1. Visit to the office of the insurance company.
2. Provision of documents.
3. Waiting for the policy to be generated.
4. Studying the terms and signing.
5. Payment.
6. Receive your copy in your hands.

Renewal via the Internet:

1. Generating calculations using the calculator on our portal.
2. Selection of offer.
3. Go to the insurer's website.
4. Filling out all sections: personal data, property characteristics and deadline.
5. Payment.
6. Receive mortgage insurance via email.

List of documents

To renew a mortgage insurance agreement with Sberbank, you will need a full package of documents. To purchase insurance you must provide:

• borrower's passport;
• document for the apartment to confirm ownership;
• technical certificate;
• previously concluded insurance form;
• application in the approved form.

As for the application form, it is filled out during a personal visit to the office. The template is issued by a company specialist. With electronic insurance, the form is filled out remotely by entering information in all sections of the application.

Where to send documents

The documents required to purchase mortgage insurance from Sberbank should be sent to a specialist’s email account. With electronic insurance, the address will be displayed on the screen of your computer or mobile phone.

When purchasing insurance online, all documents must be uploaded in your personal account.

Important ! When renewing mortgage insurance through your Sberbank personal account, you will not need to upload documents. The main thing is to confirm that personal information and passport data remain unchanged. If the data has changed, you will need to make corrections and send a copy of the borrower’s passport.

How to inform the bank that the policy has been renewed

An extended mortgage insurance form from Sberbank must be sent to a bank specialist. Of course, you can call and provide information over the phone, but the policy must be included in your file.

You can inform about the extension in any way convenient for you.

Options:

• In person in the office. To do this, you will need to contact the Sberbank office where the loan was received. Send the extended document to a specialist or secretary. Following the visit, you should request a copy of the policy, with a note of acceptance.
• Send to Sberbank email address. In this case, you should send a high-quality copy of the extended contract to the email of the manager who oversees the contract. By sending a copy to general mail, you risk that it simply will not reach the right specialist.
• To the office via courier or registered mail. You can send renewed insurance by registered mail with notification or via courier. The second option is expensive, so it is used extremely rarely by clients.

Grounds for refusal to provide compensation

Statistics show that in situations where title insurance for a mortgage is involved, compensation is rarely denied. However, this is still possible. The reasons become:

• occurrence of force majeure circumstances;
• the recipient of the funds fulfilled his obligations under the mortgage loan agreement in bad faith;
• dishonesty of the organization that insured the title.

Please note that the policy does not cover damage caused to the object due to the fault of the owner or third parties. If there is destruction, the insurance company will refuse to pay because there has been no loss of ownership. This is provided only within the framework of property insurance. The list of force majeure circumstances includes:

• confiscation of property by the state;
• rights to real estate were lost as a result of hostilities;
• loss of property rights occurred due to a natural or man-made disaster.

You will not be able to receive a refund if you violate the terms of the mortgage agreement. If the property is repossessed due to debt on a home loan, the application for payment will be rejected. Therefore, it is important to comply with the established requirements. The mortgaged premises cannot be sold, given away, its technical condition changed, or used for other purposes. Allowing the above violations will also be grounds for refusal of payment.

For your information

During the decision-making process, the integrity of the acquirer will be checked. This means that if the transaction is declared illegal due to fraudulent actions by the seller, the mortgage borrower will have to prove that he did not know about this. Otherwise, your title insurance claim will also be denied.

Is it necessary to renew insurance?

All clients are interested in the question of how mortgage insurance is renewed at Sberbank and whether it is necessary to purchase protection for the second and subsequent years. It is worth noting that each client must purchase an insurance policy for structural elements. If we are talking about life or title insurance, then this is the client’s choice.

Renewal terms

Speaking about the term, it is worth taking into account that it should not be interrupted during the entire period of validity of the loan agreement. Therefore, each borrower must, at least 5 days before the expiration of the policy, choose the extension option and apply for protection for a new term.

If the agreement form is not drawn up, the Savings Bank has the right to revise the interest rate. The increased rate will be charged until the mortgage insurance agreement is renewed with Sberbank.

Important ! It is worth noting that the bank can only require insurance extension for mandatory types. Among these, it is worth noting the protection of structural elements of the purchased property.

Advantages and disadvantages

There are a number of advantages and disadvantages to using title insurance for a mortgage. The main advantage is obtaining a guarantee of ownership of the purchased object. A person can be confident in the safety of property. If an insured event occurs, the company will bear all incurred expenses. The person will be helped to keep the property or provided with compensation for the full cost.

The disadvantage of the service is that it is imposed by banks. Sometimes companies will refuse to issue a mortgage loan if the borrower does not want to purchase a title insurance policy. In other situations, the interest rate may increase significantly.

Title insurance of real estate

Our agency specializes in providing high-quality insurance services in Moscow, including title insurance of an apartment on favorable terms.
Without it, most banks will not issue a mortgage, or they will offer a higher interest rate on the loan product. On the website you can apply for insurance and also pre-calculate the cost of title insurance for your apartment online. An insured event involves the loss of ownership of an object due to a defect in the title. Damage caused to real estate due to fire, earthquake, explosion or flood does not fall into this category.