With the massive influx of both short-sale and foreclosure inventory on the market, title insurance is needed more than ever. I sold a 3yr old foreclosed home back at Christmas to some really good friends of mine. A 3 bedroom 3 bathroom cape with 1 car garage under and finished basement on 3/4 acre at the phenomenal price of $175,000. They were truly exited, as was I for them.
They called me on Friday to tell me they received a DEMAND FOR PAYMENT IN FULL FROM THEIR MORTGAGE COMPANY because the town had notified the mortgage company that improvements were made to the home without a permit which is a violation of the terms of their mortgage. The problem is, "the improvement" the town was speaking of was the finished basement which had been finished prior to the foreclosure, it had nothing to do with the current owners. (An amusing aside: the copy of letter from the town which was provided by the bank was dated 11/07/07, which was 2 weeks before our initial offer on the property. The bank had essentially provided us with the evidence they knew about the problem before we had even viewed the property).
The short end of it is, my buyers are fine and their title insurance is stepping in to take care of the matter, but what would have happened without title insurance or that letter? I always promote insurance for exactly what it is, insurance and as I stated before, with the massive influx of both short-sale and foreclosure inventory on the market, title insurance is needed more than ever.
Wishing you all the best in life and business,
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