Sunday, May 06, 2007

query: owner title insurance on a foreclosed condo

Well, there are two policies in play. The loan policy which is now acting like an owner policy for the lender and the new owner policy which you surely are buying.

Do NOT buy real estate that has gone through foreclosure without also buying an owner policy.

Once the real estate has gone through sheriff sale and is now the property of the mortgage lender, the lender will likely hire a law firm to represent them in the sale. These law firms - the ones who specialize in REO, lender owned foreclosed property, will NOT make any of the normal guarantees. It's entirely a buyer beware kind of situation.

It doesn't matter if the property is a condo or not, buy title insurance.

Now, on the subject of condos, there may be a provision in the condo documents that allows a party acquiring title by judicial sale to forego condo fees. Be very careful if you run into this kind of situation. Condo associations typically don't understand this loophole and are likely to attempt to lien the unit. If you are caught up in this kind of an argument, get legal advice from an experienced real estate attorney.


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