@svtthis wrote:
I'm in the process of buying a hud property and I guess they don't pay for title insurance. The house I'm purchasing was just taken back from the previous owner on January 16th of this year. Should I still get title insurance? Wouldn't the bank have cleared any lines on the property if their were any during the forclosure procedures?
Under no circumstances should you skip title insurance when you buy a HUD property - even if you had the option, which you don't if you finance the purchase.
I have sold many foreclosures and the f/c bank does not always do the right thing. Fortunately you are getting a mortgage so you have someone at the lender making sure you are getting clear title. I have been the buyer's agent on a couple of occasions where a fannie mae foreclosure was not completed correctly and the title co for the seller bank tried to deliver bad title to my cash buyer. In order to get the bank to deliver clear title, we had to have the buyer hire a pitbull type real estate attorney to get it done.
Don't rely on the seller for bank owned properties to deliver clear title without a little prodding from your attorney or the attorney at your lenders office. Have the title checked by an attorney that represents your interest. The title co that is handling bank owned sales is not a disinterested third party like they are in a normal sale transaction. The selling bank has a business relationship with the title co so protect yourself. In your specific case your lender is looking to make sure you get clear title because they want to make sure nothing interfers with their mortgage lien position so that helps you. Cash buyers don't have that same protection. Still do not skip title insurance when you buy a foreclosure.
