REO title insurance question

11 Replies

Hi all newbie here

We are considering purchasing a REO from ditech. The REO manager stated he normally "closes" and signs paper work at a nearby restaurant by his house. The deal was to be done as an owner finance.

We want to get title insurance and told him that we would get our own title company for the closing. We wanted to have something to protect us. Also ditech does not have very good reviews listed. 

The REO manager then states that we will need to close with him first and he will put something in the document that states we have 30 days to get title insurance and do whatever title work or due diligence and in that 30 days we can get our money back.

Is this legit? I thought title insurance is done before you close? 

The REO manager stated that we would be closing with him. No title co etc and signing the promissory note. 
It is seller financed. 
We then asked about closing with a title company and they stated that we would have to get the title company ourselves. But they state they while we get the title company and title insurance that the property can still be sold to someone else if they come with cash it if they close without title company or title insurance 


Originally posted by @Michael De Rosa :

Are you not closing through a title company or an attorney? How are you paying for the home, with cash or a loan?

No way, no how! "Owner finance" with a REO is really odd to begin with. You need to close with a title co./attorney and have them do a title search issue title insurance.

At this point, I’m afaraid what your purchase contract said regarding the type of Deed you, title insurance, etc.  Your contract will govern, but get title insurance no matter what!

@Tonya Thompson I would want to go through a title company and have them pull a title report before I purchase any property. 

How did you find out about this REO? Is the AM working with a licensed real estate agent in the local area? Are you working directly with the AM or the agent? Where is your earnest money being held?

Originally posted by @Wayne Brooks :

No way, no how! "Owner finance" with a REO is really odd to begin with. You need to close with a title co./attorney and have them do a title search issue title insurance.

At this point, I’m afaraid what your purchase contract said regarding the type of Deed you, title insurance, etc.  Your contract will govern, but get title insurance no matter what!

Yes, after he said close with him at restaurant we got very wary. We haven’t received any paperwork or purchase agreement . They have only sent a finance estimate with rate, term etc from their credit department. 

We asked about documents and the REO manager stated that he usually gets the documents for us to sign just a few days before closing. And would "see" if he can get the documents for us to review before hand. We thought this sounded very odd.

We then called a title company. The title company we spoke to said they would need a purchase contract with legal description etc

Originally posted by @Michael De Rosa :

@Tonya Thompson I would want to go through a title company and have them pull a title report before I purchase any property. 

How did you find out about this REO? Is the AM working with a licensed real estate agent in the local area? Are you working directly with the AM or the agent? Where is your earnest money being held?

 There was for sale sign listed outside the home with the reo’s contact info.

No real estate agents on either side. The contact info listed was the Reo manager

No earnest money has been put down

@Tonya Thompson There are too many things that raise a red flags, no paperwork up front, no real estate agent, no title company/attorney, closing at a restaurant, seller financing on an REO.

Based on the info given to me in this thread, I would be very cautious about a potential scammer.

@Tonya Thompson Please either post the property address here, or send me a PM (you have to make a colleague request if you didn’t know).

This whole thing sounds Way off, like a scam. 

REO's typically:

Are sold through a local real estate co. 

You Always have a purchase agreement as Step 1

They Never close without a title go. 

They Never offer seller financing

Ditech is a real company but no company does business this way. 

I’d like to verify title/deed info on the property, Ditech’s Real phone numbers, etc. 

Originally posted by @Wayne Brooks :

@Tonya Thompson Please either post the property address here, or send me a PM (you have to make a colleague request if you didn’t know).

This whole thing sounds Way off, like a scam. 

REO's typically:

Are sold through a local real estate co. 

You Always have a purchase agreement as Step 1

They Never close without a title go. 

They Never offer seller financing

Ditech is a real company but no company does business this way. 

I’d like to verify title/deed info on the property, Ditech’s Real phone numbers, etc. 

Thanks so much! I just sent you a colleague request