Insurance for land titles pushed to restore confidence

Land titles have become, to many bankers and businessmen, a non-negotiable instrument and have been shunned as collateral for loans because banks have been "burned" so many times over fake documents.

Fake land titles have proliferated and have reached a dimension that even President Estrada himself asked Congress to pass laws that would make forging of land titles a "heinous crime" punishable by death.

Indeed, one reads or hears about exposes on lands being sold many times over to so many big and small companies and wealthy individuals (sometimes victimizing even the hard-earned earnings of school teachers, overseas Filipino workers and smaller people), that trust in land titles have dwindled to near-zero level.

Even at this late stage in globalization, economies like those of the Philippines and others in Asia have yet to adopt a title insurance program and for the Philippines it is being brought here by American Title and American National Finance Inc., undisputedly the largest in this field in North America.

Ted Padilla, vice president of American Title and American Insurance Finance Inc., said the program has worked very well for more than three decades, even though it has always been implemented on a voluntary basis because landowners, the banks and even government have been asking for it.

Explaining the need for such a program at the weekly Newsmakers breakfast forum at the Century Park Hotel, Padilla said his company thought of bringing the program to the Philippines mainly because of the clamor raised by Filipino expatriates in the Philippines, who wish to invest in real properties in the country but want additional guarantees (like title insurance) on the validity of land titles.

From such inquiries, he said, he then proceeded to the Philippines and talked to the concerned government agencies like the Land Registration Administration, the Office of the Insurance Commissioner, the Housing and Urban Development Coordinating Council (HUDCC), Pag-IBIG Fund and even the private sector, especially the developers themselves, who all welcomed the idea of implementing the program in the Philippines as a way of restoring confidence of foreign investors in the Philippines real estate sector.

"When we found that there was no law governing such a title insurance program, we approached members of the legislature to ask them to sponsor a bill, which was readily filed with House Bill No. 11974," he said.

Padilla said in the US, 95 percent of all real estate transactions are covered by title insurance because the banks and landowners themselves and even the US government requires such a program coverage prior to any deal.

In the Philippines, he said, the program can work even voluntarily because landowners are now apprehensive about too many fake titles and banks already refused to accept land titles are collateral for loans.

Padilla explained that even small landowners would want the added guarantee that what they are buying for their dream house is for real and that nobody else owns the land they are about to buy.