Buying a Foreclosure or Lender Owned Property
1. Can I choose which title company to close with and purchase title insurance from?
Yes, Section 9 of RESPA prohibits sellers from requiring as a condition of the sale that the buyer purchase title insurance from a particular title company. The only exception in our view is if the seller requires use of a particular title company they must pay for the title insurance at its sole cost and expense. Even in that situation the buyer still has the right to purchase an additional title insurance policy to protect them.
2. Can I put in the purchase agreement that I want Nebraska Land Title & Abstract (NLTA) for closing services and title insurance?
Yes, you are free to include those terms in their offer. Here is sample language: “Buyers elect to purchase title insurance and closing services from NLTA.”
3. What do I need to know about owner’s title insurance policy coverage in Nebraska to ensure I am fully protected?
It is recommended that you obtain the ALTA Homeowners Title Policy, which provides the most comprehensive title insurance policy coverage available. This policy includes coverage for:
In addition, the policy should not exclude coverage for any quiet title action related to clearing up title from the foreclosure action. You can ask the title company to provide a ‘marked up” commitment at the closing which will show what will be in your policy. If you have questions on what a “marked up” commitment looks like, your NLTA closer can help you with this.
4. Who is the bank’s title company working for?
The bank’s title company is working for the bank as the seller. That is their repeat customer they are trying to keep satisfied. We are aware of transactions where the bank has offered to pay the owner’s policy if the buyer uses the bank’s title company, and those title companies are charging additional fees that would minimize or negate this benefit.
5. Do you think these foreclosure title companies, many who are not in Nebraska, will get things done correctly or be around later if you have problems?
Some of these title companies are closing without clearing up title issues, checking for unpaid water bills, other city assessments or association dues. They are making exceptions to the policy and not getting original documents at closing. Some of these title companies are out of state and do not have a good understanding of the laws in Nebraska. It can also be very tough to reach them when you have to call an out of state 1-800 number. At NLTA, a Nebraska company, we check for all these things and make sure the closing is done the right way. As you know when you close at NLTA, things are going to be done properly, the checks are going to be good and we are going to be here in the future to take care of you.