Be Aware of Title Issues with Homes Foreclosed Non-Judicially in the Past
I thought about it, and could not come up with a shorter name for this blog… it had to be a mile long! I am sorry about that, but this is exactly what I found out in two recent escrows; one on the seller side and one on the buyer side.
My buyers got their offer accepted and shortly after opening escrow, I found out the title company that was running the escrow was not able to insure the title of the subject property due to a non-judicial foreclosure back in 2002…yes, 2002… 15 years ago!!! I used my connections and worked with the seller’s agent to find a title company that was able to insure the title. This definitely added some extra tension to the transaction, but we were able to work it out and achieve a successful closing.
My seller client purchased his home as a bank owned property that was foreclosed back in 2009. Again, we ran into the same issue with our preferred title company, and again, we used our connections to find a title company (different company that insured our buyer’s client new home) and transferred the file to them. Unfortunately, the buyer’s loan was denied, and this home is back on the market for sale at $499,000 with a flexible floor plan.
You must be asking why they would not insure the title… I did too, and I was told that attorneys on Oahu were contacting homeowners that lost their home in a non-judicial foreclosure and offering to bring lawsuits against everyone involved in the transaction… title companies, real estate agents and etc. The source of this information is very reliable and works with one of the title companies that assisted us with this issue. Just wanted to share this experience because we could see this issue happening more often.