Title Insurance and Foreclosures

Every once in a while, we’ll get some questions that make us realize that what we do for a living isn’t something the general public is super familiar with. We’re aiming to change that, one blog post at a time.

One of the things we get asked about how title insurance works with foreclosures.

Purchasing a Foreclosed Property – Do I Need Title Insurance?

People wonder whether they need title insurance when they’re buying a bank-owned foreclosed property.  The answer is: yes. Yes you do. Most of the time bank-owned properties are free of any encumbrances or liens – but that’s never a guarantee. You should always have title insurance!  The one-time fee is more than worth your peace of mind, particularly if you’re purchasing a home that may not come with any warranties or anything. Generally speaking, you should never assume that any property, bank-owned or not, has  already been searched and cleared – it’s better to get your own assurance from a third party professional.

The fact is this: foreclosures can happen for a variety of reasons, and while a lot of the title issues (such as tax liens) could be handled as part of the foreclosure process, it’s in your best interest to never assume that there will be no issues.  The fact could be very much the opposite: if there are title issues with the property, foreclosures may just be the tip of the iceberg. It’s ALWAYS better to be safe than sorry and get the most accurate picture up front to protect you when purchasing a property that has been foreclosed on.

We’re in your corner.  We want you to start your new home journey on a #solidfoundation.