State lawmakers in New York have introduced legislation that would block mortgage lenders from receiving title insurance payouts when real estate transactions are later found to be based on stolen deeds.

S.B. 7732 was introduced May 2 and seeks to prohibit title insurers from compensating lenders for losses tied to transactions deemed “false or fraudulent.”

If enacted, the measure would mark a significant shift in how title insurance claims are handled when homeownership disputes arise. It would set precedent to place greater responsibility on lenders and insurers to detect and prevent real estate fraud before loans are details ⇒

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