[amolon]

I would appreciate any advise/comments on the following matter that relates to title insurance on a Short Sale

I am looking though a Preliminary Title Report/ proposal to issue title insurance from a title company and I have come across the following.

Contained under a schedule of limits of liability are 4 matters with the following limits

- Maximum level of liability (theirs) $25000
- Deductible of 1% of policy amount or $5k, whichever is less

The 4 matters that these limits reference are
- Deed of Trust (1st mortgage)

- Deed of Trust (2nd mortgage)

- Liens and charges for upkeep and maintenance as provided in the Covenants, Conditions and Restrictions, if any, where no notice thereof appears on record.

- Any defect or invalidity in the title to said land arising out of or occasioned by any claim of a violation of the provisions of the "foreclosure purchasers" or "foreclosure consultant" laws
(Nevada Revised Statutes Sections 645F.300).

My question is, is this "normal" practice and reasonable ?
Is it that Deeds of Trust are not generally fully covered off by title insurance as the are certain to be extinguished at closing? But can that be said with certainty in a short dale, where the lenders are taking substantial write downs?

It is a large title company issuing the policy and I do not want to be too paranoid/picky, but would like to understand independantly of what the title companys explanation to this will be, which I will get also.

Sorry in advance for the boring techncial question!

[007 license to sell]

Originally Posted by amolon

I would appreciate any advise/comments on the following matter that relates to title insurance on a Short Sale

I am looking though a Preliminary Title Report/ proposal to issue title insurance from a title company and I have come across the following.

Contained under a schedule of limits of liability are 4 matters with the following limits

- Maximum level of liability (theirs) $25000
- Deductible of 1% of policy amount or $5k, whichever is less

The 4 matters that these limits reference are
- Deed of Trust (1st mortgage)

- Deed of Trust (2nd mortgage)

- Liens and charges for upkeep and maintenance as provided in the Covenants, Conditions and Restrictions, if any, where no notice thereof appears on record.

- Any defect or invalidity in the title to said land arising out of or occasioned by any claim of a violation of the provisions of the "foreclosure purchasers" or "foreclosure consultant" laws
(Nevada Revised Statutes Sections 645F.300).

My question is, is this "normal" practice and reasonable ?
Is it that Deeds of Trust are not generally fully covered off by title insurance as the are certain to be extinguished at closing? But can that be said with certainty in a short dale, where the lenders are taking substantial write downs?

It is a large title company issuing the policy and I do not want to be too paranoid/picky, but would like to understand independantly of what the title companys explanation to this will be, which I will get also.

Sorry in advance for the boring techncial question!

Bankers have told me that they don't get paid on the PMI in a short sale so they let the property go into foreclosure. That is another reason short sales won't close, also if your doing a short sale make sure in the verbiage that you will not be held responsible for any deficiencies, lenders have been having owners sign promissory notes on the deficiency and the seller in some circumstances weren't aware it was in the contract.

The banks have been selling the deficiencies to outside investors that start to collect right away. Make sure to contact a real-estate attorney besides using a realtor and also an accountant because you could end up paying. I have seen where buyers quite making their payments and since they were using the interest as a tax deduction ended up owing taxes.
As a home owner if you are thinking of short selling your property you will want to know this. This information was sent to realtors but I feel it is important to share this with home owners who are thinking of short selling their property.


Click on the link below.
[SIZE=2][/SIZE][SIZE=2]New Hurdle for Short Sellers[/SIZE]
[SIZE=1]Pete Goodman - Goodman Realty, Capital City California[/SIZE][SIZE=2]
The negotiator explained that the investor who will be approving the deal will be pulling my seller’s bureau information to verify that the seller also stopped paying others. [/SIZE]
[SIZE=2][/SIZE]
[SIZE=2][/SIZE][SIZE=2][SIZE=3]Anyone thinking of doing short sale needs to talk to their accountant and/or Attorney.[/SIZE] [/SIZE]

[amolon]

007
Thank you...but I am the buyer in a short sale, so my questions are from that perspective