Banks selling their REO property often require that the buyer use the bank’s title company for the closing.Is this intelligent?The Bank’s foreclosure title agencies seem overwhelmed and have been missing liens in the foreclosure actions. Unfortunately, if they handle the closing afterward they often don’t double-check their work. They simply update the title, looking for new items which may have shown up. This means they can’t tell if they missed something or not.Here are just a few bank-owned issues we have encountered in the last couple months;
1. A second mortgage for $62,000 was missed.
2. A second mortgage for $110,000 was missed.
3. A Federal Tax lien for $10,000 was missed.
4. The bank took a deed from the owner, then tried to sell it with a $1,200,000 lien still on the property,
5. The bank had their title agency close a deal in which the bank didn’t own the property yet, and the buyer could have lost it. The bank bid on the property in the sheriff sale, but sold the property immediately after, months before the confirmation was filed and the deed recorded. Even as a successful bidder the bank doesn’t own the property until the confirmation is filed and the deed is recorded. Until that time, the prior owner can get it back, usually with the help of a relative. The confirmation was not filed for months after the bank sold it. The closing should never have occurred until the Bank took title.The buyer was contemplating suing everyone, including their Realtor.Take Control! If you have the opportunity, the agent can push back and control the situation by choosing the Title Agency
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