There is a need to change the ownership whenever there is a sale of any property. Title insurance protects from losses that may occur due to defects in the title chain of the property. However, not many people know about this.
Title insurance companies manage these changes in ownership. Their job is to ensure the proper processing of mortgages and ownership transfers. Title insurance is highly recommended because it ensures the ownership to the property. It also provides information as to the accuracy of the public records.
Some of the most common types of defects included in the chain of title are improperly recorded documents, undisclosed heirs, inadequate tax records, deeds by minors, and even forged documents. Property owners hire title insurance companies to do a thorough research so that there are no such defects in their property ownership.
Title companies are record-keeping agencies specializing in transaction records related to real-estate, loans and transfers. However, if there are any title chain issues with public record-keeping agencies, it can lead to a delay in completing your transaction.
Problems with the public record-keeping agencies
You have to visit a local office to view the records.
One can easily change or tamper with the document package.
It is a very tedious and time-consuming process to go through all the documents.
How the blockchain system helps title companies
Anytime and anywhere access
Records are digitized and placed in a secure blockchain system, meaning you can access documents from anywhere. You are only required to login to a secure blockchain system to access your digitized records.
A blockchain system allows users to check a record and confirm it before updating it in the block. Multiple copies are made once the file is placed in the blockchain system. The only way to change the record is to update it in all the blocks. This update is added as the next record under the previous one, making a list of files throughout the transaction.
It is very time-consuming to check transaction records in any public agency. In case there needs to be some change in ownership rights, it will sometimes take days and even weeks to make these changes. With the blockchain system, title insurance companies can check a record and apply changes within minutes. This way, title insurance companies can effortlessly handle multiple clients at once.
Secure and reliable
It is impossible to make any changes after adding a transaction record to the system. Security and reliability are some of the main benefits of a blockchain system. Documents are first converted to a secure hash and then added to the system. This hash value is unique, and you cannot tamper with it. If this hash changes, all the blocks have to update it in the system to keep it in sync. Any tampering with the record will be visible, therefore, making it secure and reliable.