Convicts can acquire, convey and encumber title to real property.
Insurance of titles coming through instruments executed by inmates, without court or any form of governmental approval, should be considered extremely hazardous.
Such instruments have been subsequently attacked by the inmates themselves on the basis that they were executed under duress, under promise of a certain benefit never received, or during a period of emotional or mental instability.
Careful consideration must be given to any possibility of disaffirmance or attack by the inmate, prior to deciding on the insurance of the title. Limitations on disaffirmance can be accomplished by having the documents signed through the auspices of prison officials rather than family or friends, or defense attorneys.
For example, you should consider whether the crime or criminal proceeding evidenced possible incompetence of the inmate.
If a sale is occurring, the conveyance must be an arm's length transaction, and the inmate must be receiving current valuable consideration (for example, as opposed to prior debt such as legal fees).
An inmate must sign most forms of lien instruments to encumber his/her homestead interest in the property. Some inmates provide a family member with a power of attorney to be used to the period of incarceration. Please review Sec. 15.48 for use of Power of Attorney.
Inquiry should also be made as to whether the crime for which the inmate was convicted may be basis for forfeiture of title to the real estate; this is particularly apropos if the inmate was convicted of a drug-related crime. If so, you should not issue a policy on the transaction involving the inmate without consulting the Texas Underwriting Counsel.