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Title insurance won't protect you. Read the fine print. They are not liable if they list the lien. Title works for the Banks/Broker... Not you.
Buying a foreclosed home is very risky. They are trying to have others clean up their mess. You won't be able to refi or sell it with liens.
The banks won't pay them. Especially on a foreclosure.
The title insurance paperwork (prelim) says that the liens will be cleared before they record the closing and lists the liens they plan on clearing. I asked my realtor and the VP at the Title company and they said they would not be able to sell the house to me with the liens uncleared because the contract stated that the sale was dependent on a clear title. This whole thing is new to me in AZ since attorneys are not involved - in New England an attorney handled it and made sure liens were clear before closing. My realtor has been in business for 26 years and she swears that everything is fine and that they just do things differently here. She said she would never let me buy a house with liens (and that's why she told me to stay away from auctions). Since I'm new at how things are handled here I wasn't sure how things worked - but I'm hoping everyone is telling me the truth so far.
Edit: I just read through the docs again and it states this:
19. Furnish for recordation a deed as set forth below:
Type of deed: Warranty Deed
Grantor(s): JPMorgan Mortgage Acq Corp
Grantee(s): (our names)
So maybe it's a Warranty Deed and not a Special Warranty Deed? (I got the Special term from the sales contract and not the title company paperwork)
Last edited by luvmyelement; 06-18-2011 at 05:54 PM..
Reason: added edit
Title insurance won't protect you. Read the fine print. They are not liable if they list the lien. Title works for the Banks/Broker... Not you....
If the lien is listed, then they would be unable to convey clear title as required by the purchase contract. Insurance will protect you if new liens are discovered after closing. However, it's important to understand what type of liens and issues will be covered by the insurance, and if an extended policy should be considered.
Get title insurance to protect your title for future discrepencies, but all liens should be satisfied when purchasing a home, double and triple check the HUD1 to make sure all of them were paid off!!
The next big breakup will be between banks and Title insurers.
Banks want the Title co. to cover their Assets at the expense of future litigation.
Title insurance is telling them to take a hike.
The MERS con is coming home to roost. BTW Bank of America, JP Morgan Chase and 2 of the largest Title companies started MERS along with Fannie and Freddie when they were private. Created for Greed, and no concern for our economic stability.
I'm purchasing a foreclosure and in the prelim title report I see a TON of liens. Will these be cleared by the bank or will they convey to us? I'm in Arizona if that matters and it is a cash deal.
Any help is appreciated.
Almost all liens are separated into two groups: first is the legal and federal lien which may be enforced by law and second, the equity liens which are valid only in the court of equity.
A tax lien may be waived once the debt is either fully paid or on arrangement between parties.
there will be liens that will clear off easy, but some that will stay. Liens that you would have to pay that may effect the title, HOA fees if there were any. These types of liens are for sure going to stay on if you deside to buy the property
Not all liens will be clear some will stick on. The ones that won't clear are liens for property taxes, insurance, and maintenance.
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