Title Insurance Horror Stories & How to Avoid Them

Dru Wischhover (00:00)
My client has 50 % ownership of that house still. And the owners are like, what are you talking about? Well, the seller was married, got divorced.
And never had his ex-wife sign the deed for her half interest in the house. She had homestead rights because she lived in the property while they were married, but guess what? They got divorced. That doesn’t get rid of the homestead right. She was supposed to be either she had to deed the property to him or her interest to him, or she needed to execute that deed saying that both him and her were selling that property to current owners.

this lady has a 50 % ownership of that house. Now, if the house is $500,000, she’s $250,000 of monies that she’s got a value to. So that becomes what they call a title insurance claim, where the title insurance company is sorted out.

Michelle Kesil (02:27)
Hey everyone, welcome to the Investor Fuel podcast. I’m your host, Michelle Kesil. Today I’m joined by someone that I’ve been looking forward to chatting with. Today we have Dru Wischhover, hopefully I pronounced your last name correctly, who’s been making serious moves in the title insurance space. So I’m really glad.

to have you here on the show, Dru. I think our listeners are going to take something away from how you’re approaching the insurance business. So let’s dive in.

Dru Wischhover (03:04)
Absolutely. Thanks for having me. Glad to be here and Wischhover is correct. You did well. Yeah, I’ve heard it. I’ve heard it said so many different ways

Michelle Kesil (03:11)
I’m sure. Awesome. So first off for people who may not be familiar with you and your world, just give us the short version. What is your main focus these days?

Dru Wischhover (03:21)
Our main focus with a business that is kind of a, and I call it an enigma, we are, you know, we’re a part of the process, we’re a very, very necessary part of the process that a lot of people don’t know that much about.

We’re very integral in protecting the ownership and the rights of people when they’re buying a house. I mean, you’re fulfilling America’s dream, which is, you home ownership. we are protecting that home ownership by protecting that asset, which is the house, and that the rightful owner, which is you, belongs in that house. So we are a ⁓ big part of this thing, but very little folks know about the details that really go into that and the process of how we arrive

at that.

Michelle Kesil (04:05)
Yeah, absolutely. Can you expand upon that for those people that don’t know?

Dru Wischhover (04:08)
yeah, for sure. we, you you think about insurance, really, Michelle, and a lot of people think about insurance to protect you for everything that’s going to happen in your life going forward, right? Well, title insurance protects you for everything that has happened on that property since the beginning of time. Since it was dirt and there was never a house on it, we go back and check the records and make sure that every transfer from the beginning of time was done properly, has been done correctly, and that the person

who is actually selling you that house is the rightful seller.

to giving you that house clear and free of any liens or encumbrances. And when I speak about liens and encumbrances, mean prior mortgages, tax liens, any kind of tax debt. If you built the house, there could be mechanics liens on the house, which are nothing more than a contractor putting a lien on the house because they didn’t get paid. So we want to make sure that you own that house and somebody’s not going to come back and knock on your door and say, by the way, yeah, my husband and I, got divorced and I really own part of the house because I never

the deed. ⁓ now that’s a problem. That’s where title insurance comes into play and really is impactful for protecting you against somebody staking a claim and what is your house. So it’s incredible and people talk about, well that probably never happens. Title insurance, the title insurance industry has claims that are, I mean I could tell you horror stories upon horror stories.

Michelle Kesil (05:34)
Let’s hear one.

Dru Wischhover (05:34)
amount of claims that

are out there. so exactly this. So the folks bought a house, husband and wife living in the house, everything’s cool. They get a call from an attorney that says that, just that,

my client has 50 % ownership of that house still. And the owners are like, what are you talking about? Well, the seller was married, got divorced.

and never had his ex-wife sign the deed for her half interest in the house. She had homestead rights because she lived in the property while they were married, but guess what? They got divorced. That doesn’t get rid of the homestead right. She was supposed to be either she had to deed the property to him or her interest to him, or she needed to execute that deed saying that both him and her were selling that property to current owners.

this lady has a 50 % ownership of that house. Now, if the house is $500,000, she’s $250,000 of monies that she’s got a value to. So that becomes what they call a title insurance claim, where the title insurance company is sorted out.

They obviously pay her and satisfy that so the people are protected, that they’re not gonna have to move and pack up all their stuff. But…

because of a mistake that a title company made and not getting all the signatures on the deed, this could have been a really bad thing for those owners. And that’s just one of many. There’s tax problems. I mean, you hear people losing houses to tax deeds. You don’t pay your real estate taxes. It’s not like your income taxes or anything like that. We’re talking about your property taxes for your house. If you don’t pay those,

after a period of time, they get sold. And when they get sold, other people buy them. If you don’t redeem those taxes, now somebody else owns your house. You can live there until they knock on the door and say, hey, by the way, you don’t own the house anymore. I have a deed from the sheriff that says I own your house. Now you’ve got to leave. So these are all the things that title insurance kind of protects you from. it’s out there. I’m telling you, it’s out there because you hear the commercials for

you know, all the protect your title to your house. Not so much from that because somebody stealing your title is not as common as what I’m talking about. What I’m talking about is all of the conveyances that happen when you talk about insurance has been done correctly. So like I said when I started, title insurance protects you from the time that that property started out and existed till the time you own it.

Everything it’s so it pays it’s it’s from behind and you only pay it one time Whereas car insurance and health insurance you pay every month When you buy title insurance, it’s part of your transaction when you do the closing of buying the house You pay it one time and it’s it’s such a small dollar amount when you talk about the value of the protection that you’re getting It you know, I would

For people not to have it, and I don’t just say it because I’m in the business, I say it because I’m in the business and I’ve seen what the potential risk and loss could be to some of these innocent parties. It’s so scary. It’s so scary.

Michelle Kesil (09:28)
Wow, yeah, it’s quite, can’t imagine just having one of those situations happen. it’s so valuable to be educated on the importance of that.

Dru Wischhover (09:32)
Yeah.

Absolutely, absolutely. Can’t take it lightly.

Michelle Kesil (09:41)
Yeah,

yeah. So like what has been like the key to keeping this business running smoothly.

Dru Wischhover (10:23)
Yeah, it’s, you know.

I think that we thrive on our successes. mean, there’s nothing greater than watching people fulfill the American dream of homeownership. And when, you you see a first time home buyer and they’re super excited about that house, it just makes you want to do it again and again. And then you see the elderly folks who are selling that house to another party and that’s the house that they started in. There’s a story there. There’s so many stories and it just,

It just, it keeps feeding us to doing this and the excitement of saying, you know, we’re doing more than just a job. We’re doing a service and it’s a good thing to watch this happen. It’s a good feeling to being able to protect the ownership of, you know, first time home buyers, of new transactions and allowing them to have this wonderful confidence that

Okay, everything that Inspired Title did is protecting me and I’m not worried anymore that somebody can kind of take my house from me. And there are…

There are several different facets of the business. mean, we are insuring the owner and we’re also insuring the lender. So there’s two types of title insurance. There’s an owner’s policy, which is for the person who owns the house, and then there’s a loan policy or a lender’s policy. That covers the lenders, okay? So if you’re borrowing money to buy that house, they want to know that somebody else can’t take out…

the money so they’re in a first lien position meaning that they have lent you money and that if you ever sell that house you’re going to pay them off first. They want to make sure that nothing is going to infect that or interrupt them getting paid off from the sale of your house.

We’re working on both sides of the fence here. We’re ensuring the lenders to make sure that they’re covered and we’re making sure that the owners are covered. All within the process of what is called the closing process. And you have an attorney that typically helps you out, have realtors that help you out. All of these professionals gather together and…

Culminate at the end to say guess what we’re finally here. It’s closing day. You’re gonna sign the proper paperwork you’re gonna sign the the loan documents that you’ve kind of talked to your lender with and There you’re gonna get the keys handed to you And you’re also gonna know that somebody can’t take that house away from you, but don’t misunderstand It’s not homeowners insurance

Title insurance and homeowners insurance are very different. People get that kind of confused at times because realistically, if your house burns down, title insurance is not going to touch that. If somebody steals something from your house, title insurance is not going to do that. Title insurance is going to protect you against a claim that is challenging your ownership.

in that property. So you own that property and the land around it. You know, that’s why they do surveys and that’s why they do these boundary surveys and such because you have easements, have your building lines and things, that’s also part of the protected coverage that happens within a ⁓ title insurance policy. People have built pools in their backyard. Well, if that in-ground pool is on the easement,

and you know your happy folks that have to do the work on the power lines drive down that easement and they you know damage your pool that’s not their fault you put the you put the pool on their easement so you’re responsible for that your title insurance isn’t going to cover that you’re you know we’ve had that where they’ve they’ve made that they’ve had a knock down like if you’ve got a shed or a garage that is on their easement they can’t get their truck down there

they’re going to ask you to take it down at your expense, not at the side bill insurance company’s expense. You built that garage on that easement. You put that fence on that easement. They’re going to knock it down. It’s part of what they’re going to do. you know, it’s just knowing what you have and what you can and cannot do and these are all things that your attorneys are going to explain to you and realtors will explain to you through the process of it as well. you know, it’s the, you know, we’re the CSI.

behind the scenes guy of real estate. We’re doing all the, and then we report the news. We assemble it into information and say, here, this is everything that’s happening on your property. Here’s all the mortgages that are recorded. Here’s your taxes and how much they are. Here are the easements, the building lines. And then before you close, if there’s anything that has to be dealt with, if you’ve got any kind of…

open items on there such as any kind of liens or encumbrances that have to get paid off from the prior owners and such. All of that stuff gets taken care of so that when you own it, it’s clean. You don’t have any of those debts that you have to take care of and pay anymore. That’s a lot of stuff, isn’t it Michelle? That’s a lot of long-winded stuff.

Michelle Kesil (15:11)
Yeah.

It is, but it’s

important for people to, yeah, be aware of.

Dru Wischhover (16:01)
Yeah, yeah, I think it’s, you know, in every state it’s different. know, we’re licensed in Illinois and Indiana, but we can do title insurance across the country through our underwriters and things. But it’s amazing how much different it is in, how much it differs from state to state. Because some states are regulated, which just means that if I buy title insurance from, you know, me, or I buy it from somebody else down the street,

It’s the rates are the same. It’s a regulated state saying that your title insurance premium is going to cost you X based on how much, you know, your house is valued at. In Illinois, it’s the Wild Wild West. It could be, you know, I mean it’s all over the place because, you know, it’s so competitive and it’s so difficult and it depends on what county you’re in and there’s just so many different factors that play into it. Indiana is a regulated state. Some states are dictated by attorneys where

Attorneys have to be present at the closing to help you facilitate that transaction. Illinois is an attorney state. Indiana is not. it’s just, it’s knowing the market, knowing the people, and it really allows us the ability to help out our clients.

Michelle Kesil (17:12)
Yeah, absolutely. That’s great. So let me ask you this. What is like that next real goal for you?

Dru Wischhover (17:20)
Well, I am very, very passionate about giving back. I have started a 501c3 not-for-profit organization. As part of, you know, I’ve utilized a business that is not so very well known to people to do good. And what I mean is every closing we do, every transaction that we kind of consummate,

we donate a portion of the proceeds that my company makes to different charitable organizations. And I said, well, okay, that was fun and we love doing that and my whole team is excited about that. So I wanted to start kind of our own. we’re doing a inspired for heroes or inspired by heroes. And so we’re now, we’re putting on mental health panels. So we’re going to different communities and starting to introduce and try to break that stigma about mental health.

we’re giving back to heroes. So we’re very involved with heroes, whether you be a veteran or you be a frontline worker and you know the hospitals or a teacher or police and fire. So this is just something that I’m able to do and that’s like my next venture is to really building that out and really doing some more good in the community because I just I’m just so excited about you know taking something that is

You know, I’ve been blessed with this ability to do this industry and do this business and say I can turn it into doing something good as well.

Michelle Kesil (18:40)
Yeah, that’s so beautiful. I love that service, focused.

Dru Wischhover (18:43)
Thank you. Yeah,

yeah.

Michelle Kesil (18:45)
So a lot of people that listen to this show are investors. How does your insurance policies affect them?

Dru Wischhover (18:49)
Mm-hmm.

So we are seeing a huge influx in investors. And we are a title company that is very investor friendly. And what I mean by that is nothing more than a lot of the investors, they go to seminars and they hear these stories about how they can buy properties and how they can obtain quick flips and back-to-back closings and subject to and all these terms that are being tossed around the industry. Well, we are at your

⁓ Your your beck and call we’re gonna hold your hand and get you through that process because what I’ll tell you about investor deals is Not every one of them is the same and every one of them is is different and difficult in its own way if you We’re gonna guide you through the process and hold your hand to say you know what I know what you want to do I understand what your goal is here Let’s do it this way because we have experience in doing this I’ve been we’ve been doing this for 25 years the reality is is that

maybe the lender doesn’t want to see it look like this, but if you title it just this way, all of a sudden, they’ll accept that charge and they’ll accept that fee and that cost. So we’re helping to educate them a little bit more and getting them across the finish line and helping them succeed in their goal of closing that deal because nobody gets paid until they close the deal, right? So we have adapted to become, we don’t just do.

residential transactions, we do commercial transactions, we do investor deals. Back when, you know, 2004, 5, 6, when the market crashed, we were doing these quick flips. I mean, it was incredible how you just have to, you know, go with the ebbs and flows of what’s happening in the business. we are very investor-centric. We do so much investor work from people that are out of state that call us up and say, because they don’t know what Illinois’ laws are, they don’t know what Indiana’s laws are. We do, obviously, because we’re working here.

But you have to, you can do one, if you don’t have a real estate license, you can do one transaction as a wholesaler in Illinois, okay? Otherwise, your second, third, fourth and on have to be done with a realtor. Cool. We have a realtor in-house that we can, you know, connect you with and we’ve got the attorneys that we can connect you with. We have all the tools and resources that we make it so simple that you come here and we’re going to take you from the beginning to the end. So whether you’re a seasoned veteran at this,

or you’re a brand new person, Inspired Titles is a company that you can work with and we’re gonna get that job done, we’re gonna get it across the finish line and maybe you’ll get another friend in the process because we’re friendly and we just, we are people based and people are, and you’re gonna help, you’re gonna help our mission of giving back. What’s better than that? American Dream and giving back, I think they go hand in hand to me.

Michelle Kesil (21:30)
Yeah, that’s great. Thank you for sharing all of that. All right, so before we wrap up here, if someone wants to reach out, connect with you, maybe collaborate or learn more about what you’re doing. What’s the best way for them to reach you?

Dru Wischhover (21:33)
Yeah. Yeah.

Love that, thank you so much. So I think right now the best way to get a hold of me is on my LinkedIn. You can certainly connect me on LinkedIn, which is Dru D-R-U, not traditional spelling. I was born into that, I didn’t have a choice, okay? Mom named me and mom spelled it, didn’t have a call, okay? D-R-U, and then last name is Wischhover, it’s W-I-S-C-H-H-O-V-E-R. So I am on LinkedIn, ⁓ Inspired Title Group.

Michelle Kesil (21:59)
You

Dru Wischhover (22:14)
is the name of my ⁓ title company. Happy to answer questions, happy to collaborate with anybody. More importantly, I’m happy just to meet people and help them on their investment journey and investor journey because it’s not easy and I’ve been there. you know, allow us to help you.

Michelle Kesil (22:30)
Perfect. Well, listen, I appreciate your time, your story and perspective. We need more people in this space who are doing things in this right way. So thank you again for being here.

Dru Wischhover (22:40)
Thank you so much for having me. I loved it and keep doing it. Keep doing it. Great show.

Michelle Kesil (22:44)
Thank you and thanks. Yeah, for those of you that are tuning in, if you got value, make sure you’re subscribed. We have more conversations coming with operators just like Dru who are out here building real businesses and we’ll see you all on the next episode.