U.S. CitiesCity-Data Forum Index
Go Back   City-Data Forum > General Forums > Real Estate
 [Register]
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
View detailed profile (Advanced) or search
site with Google Custom Search

Search Forums  (Advanced)
 
 
Old 11-01-2012, 08:06 PM
 
107 posts, read 244,763 times
Reputation: 82

Advertisements

Hello,

Today I finally got my mortgage commitment letter for my new house. Everything was fine until my attorney calls me and notifies me that the title search has found an issue. My attorney then goes an explain about the Albarez vs U.S Bank case and tells me the Title has the same issue. The current owners bought the house from a foreclosure in 2008 so they did not have an issue when they bought it. The current owners have title insurance because when they bought the house this whole mess wasn't an issue yet. So according to my attorney, I will get title insurance (verified with Title insurance company) if I do buy the house. I was also explained about the whole legislature that's waiting approval (Senate Bill 830) which will clear all this mess. However my question is... what are the risks? What if the legislature never gets approved? My fear is if the legislature never gets approved, I will never be able to sell the property in the future... I am not too worried about the foreclosed owner showing up (after 6 years) and claiming the property because I will have title insurance...My head is going to explode...

This is killing me... Has anyone experienced this issue before? Should I run away from this title?

My bad, I meant Ibanez and US Bank Court case. I got confused with another Supreme Court case.

Last edited by Marka; 11-10-2012 at 01:15 AM..
Quick reply to this message

 
Old 11-02-2012, 04:10 PM
 
6,359 posts, read 7,327,369 times
Reputation: 10807
If the Title Company says that they will provide title insurance, why are you concerned that you won't have good title? What does your attorney say?
Quick reply to this message
 
Old 11-02-2012, 04:35 PM
 
107 posts, read 244,763 times
Reputation: 82
The main issue is this. The Title insurance will provide me with insurance because they are already insuring the current owner. The reason they are insuring the current owner is because he bought the insurance around 2008 before the Ibanez vs US Bank SJC decision in Massachusetts. That court decision basically clouded all titles that were processed with incorrect assignment. The current title insurance basically does not have option but to insure it because it's already taking the risk with the current owner.

My attorney is telling me that the current title insurance can provide me with a clean title policy with no restrictions that my lender will approve. However it doesn't mean the title is not clouded...it's still clouded because of the court decision in 2011. There's a legislature right now trying to get approved in MA..(Bill S.830). If this gets approved the title will get clean.... but the question is... is it worth taking this risk? Basically the risk will be that I will have a hell of a time trying to sell this place if the legislature doesn't get approved. Yes, the future buyer will have title insurance the same reason I can have it... but I am sure it will scare a lot of buyers...
Quick reply to this message
 
Old 11-02-2012, 07:33 PM
 
Location: Lexington, SC
4,281 posts, read 10,289,034 times
Reputation: 3700
I think your attorney is saying see how good I am one one hand but on the other hand is saying do not worry.

If the lender and the title company are not concerned, you probably do not have to be.
Quick reply to this message
 
Old 11-02-2012, 08:05 PM
 
107 posts, read 244,763 times
Reputation: 82
I've talked with my attorney again and she's telling me that the Title Insurance company will even write a Letter of Indemnity/Undertaking. But she still warned me that there are small risks such as problems with resale later in the future IF the title never gets cleared (ie. Legislature never gets passed). I guess this is a decision I need to make....ugh...
Quick reply to this message
 
Old 11-03-2012, 02:53 AM
 
6,359 posts, read 7,327,369 times
Reputation: 10807
Although new legislation might help, I don't think it hinges on that. The Title Company could probably file a Quiet Title motion with the courts if it really becomes an issue. Plus, the more time that goes by, the less likely that you will have an issue.
Quick reply to this message
 
Old 11-03-2012, 08:24 AM
 
107 posts, read 244,763 times
Reputation: 82
I'm wondering... its been more than 3 years since the foreclosure... Can't the title be clear with a foreclosure by entry?

Wow... I have to decide on Monday if I wanna continue this deal...won't be sleeping tonight...

Quote:
Originally Posted by jackmichigan View Post
Although new legislation might help, I don't think it hinges on that. The Title Company could probably file a Quiet Title motion with the courts if it really becomes an issue. Plus, the more time that goes by, the less likely that you will have an issue.
I thought about this and then my Attorney told me about the What Now? Bevilacqua v. Rodriguez Leaves Toxic Foreclosure Titles Unclear | The Massachusetts Real Estate Law Blog

Basically Bevilacqua bought a foreclosed home and then tried to file a "Try Title" and the MA SJC did not let him because he did not own the title from the beginning since the foreclosure was not done properly. The only caveat is he did not have Title insurance....

Last edited by Marka; 11-10-2012 at 01:14 AM..
Quick reply to this message
 
Old 11-06-2012, 08:56 AM
 
Location: deep woods
404 posts, read 611,819 times
Reputation: 558
Default title insurance

There is a lot of theory that could be written about what could happen in the future from foreclosures that may have not been done properly, but I suggest that your decision would really be based on how much you understand and trust title insurance in general. You are apparently in a title insurance state.

I suggest to ask your title insurance agent (often your attorney may be your title insurance agent as well) to give you a half hour and explain it. But essentially, with any property, not only recent foreclosures, it is theoretically possible that someone makes a claim of ownership on 'your' property.

For example: (true story) An ex-spouse of an owner 3 owners back can appear at any time and claim they had ownership rights that were not properly closed out. The other spouse bought the property during the marriage but hid it from the ex-spouse and sold it after the divorce but its ownership was not addressed in the divorce. It was marital property and both husband and wife had ownership rights. Is that person going to show up at your door? Yes! Or more likely in a certified letter from an attorney.

Think of title insurance like car insurance. Theoretically, if something happens, it will make you whole, one way or another. Either by paying you, or by paying off the other person. Yes it's theoretically possible a court could award a property to a claimant. That's not typical. Typically your title company buys them off. Just like car insurance, sometimes you have to get an attorney to make your title company do the right thing.

So you would be given an insurance policy against somebody from the past coming back and making a claim. Including anyone improperly foreclosed upon. It would make you whole. Beyond that, I don't think there are any realistic guarantees. Who knows what law could be enacted from the improper foreclosures.

Not many guarantees in life.

Last edited by gv28; 11-06-2012 at 09:19 AM..
Quick reply to this message
 
Old 11-06-2012, 11:37 AM
 
107 posts, read 244,763 times
Reputation: 82
Thanks for the reply. The sellers are waiting for my response. My attorney is telling me that she wouldn't buy it because of all the legal ramifications and we never know what the future awaits. The legislature might never get approved and the title insurance might never fix the issue so the title would be in limbo forever... But the thing is, this can go the other way. I refuse to buy and then in a few months bam! legislature kicks in and I basically lost a good deal....Ohhhh the dilemma. By the way I noticed the place I am trying to buy is out of the market... out of mls etc. I think this is it for the seller, if I pull out from the contract I don't think they can sell.
Quick reply to this message
 
Old 11-06-2012, 10:26 PM
 
6,359 posts, read 7,327,369 times
Reputation: 10807
I would echo the reply from gv28. Talk with a title company agent to better understand the insurance policy and how it might work if, by chance, something does arise at a later date. If you can be comfortable with their reply, what do you have to lose by purchasing the house--other then potentially some worry or inconvenience?
Quick reply to this message
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.

Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.


 
Please update this thread with any new information or opinions. This open thread is still read by thousands of people, so we encourage all additional points of view.

Quick Reply
Message:
Over $104,000 in prizes was already given out to active posters on our forum and additional giveaways are planned!

Go Back   City-Data Forum > General Forums > Real Estate
Similar Threads
Follow City-Data.com founder on our Forum or

All times are GMT -6.

2005-2018, Advameg, Inc.

City-Data.com - Archive 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35 - Top