BziBee and Alison 's Blog

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Discussion about the Hampton Roads Bank Crisis

Bank crisis another one on the horizon. Title insurance might not be issued on some of these homes. Buyers Lenders are looking to see a 60 year search done. On many of theses homes to ensure a clear title. Where is the breakdown? When the trustee takes the home at the courthouse steps they don't always finish the process. Here are a few steps that should happen after the foreclosure. Certificate of foreclosure will be issued with the results of the sale and notarized . Then the foreclosure deed is typed out. The new deed for the house goes back to the bank or the investor who bought it at auction.  If the attorney did not prepare all the proper documents and have it recorded properly the new deed might be rejected and not recorded. This makes the process slow down and the deed still shows the original owner. In the interim the home may get listed and sold but at closing the new title company finds the deed was not transferred properly. The big issues may arise when the bank did not get the deed and certificate done quick enough more liens and debt might be against the home. If the buyer files bankruptcy but the deed never was recorded the original seller is still listed as the owner ?   http://bzibee.wordpress.com/2010/10/13/crisis-with-the-foreclosure-market/


Alison Creamer, Realtor, ABR, CDPE
Direct 757.652.8880
Licensed to sell Real Estate in Virginia
Keller Williams Realty
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Sell Hampton Roads Homes

 

 

Comment balloon 1 commentAlison Creamer • October 13 2010 11:51AM

Comments

Some of the problems you describe have existed (at least potentially) for a long time, though exacerbated by the processing and handling of deeds since about 2004. There's also a problem with regular so-called "equity sales" in the past few years. Those deeds weren't handled properly, either. Everyone's starting to notice the flaws in the foreclosed properties because, in some cases, the former owners are contesting the foreclosures. But those same flaws--forged signatures, and so on--exist in the basic title work of many homes not in foreclosure. Problem is: When the owners want to sell, those flaws may appear and make the sale impossible.

And when those owners look to their title companies, they're likely to be disappointed. It's likely that many title companies will go out of business as a result of the foreclosure meltdown. Even if they don't, it's likely that some legislation will be passed that, in an attempt to protect the title companies against liability from these flawed transactions, will also protect the title companies against legitimate claims from owners.

This is a mess that's going to get far worse, and to stick around for years to come.

Posted by Donald Tepper, DC area investor helping heirs of inherited homes (Long and Foster) about 9 years ago

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