Star Scammed - Didn't Have Title Insurance (Big Mistake)

Investor · Member since 2021 · 265 posts · 305 votes

Detroit mayor Duggan says HGTV's Nicole Curtis was 'scammed' in house deal

DETROIT (AP) - The star of HGTV's "Rehab Addict Rescue" apparently was "scammed" when she bought a blighted Detroit home from someone who wasn't the owner, the mayor said.

The Detroit Land Bank Authority holds the title to the house. Nicole Curtis said she paid $17,000 for the property in 2017 and has spent $60,000 in repairs and other costs so far.

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You would have thought an experienced investor wouldn't make such a bad rookie mistake.

Be careful out there, get title insurance.

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Peter Walther

Specialist · Winter Springs, FL · Member since 2009 · 1k+ posts · 747 votes

Problem is even if she had gotten a title policy, the amt of insurance would probably have been $17k leaving her self insured for the additional $60k. Many people aren't aware you can buy a policy for the ARV at the time of purchase. The policy should have a pending improvement clause in it.

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Steve Vaughan
Rental Property Investor · East Wenatchee, WA · Member since 2014 · 10k+ posts · 16k+ votes
5y
Originally posted by @Shelby LeBlanc:
@Steve Vaughan Great info! I currently have a seller who doesn’t want to use the title company. I’ve known the seller for almost 20 years. I may just do the search myself and not go to the title company for the closing. I can record it at the county.

Thanks, Shelby. Did your seller say why no title co? Just to save the costs?

I'm usually ok doing my own search if the same vesting has existed during their ownership. No death, divorce, dissolution, QCDs, lis pendens, etc.

At least pay the $150 for a title co to e-mail you a full O&E report and call the city/county to verify any utility bills or pending action.
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Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
5y
Originally posted by @Peter Walther:
Originally posted by @Account Closed:
Originally posted by @Peter Walther:
Problem is even if she had gotten a title policy, the amt of insurance would probably have been $17k leaving her self insured for the additional $60k. Many people aren't aware you can buy a policy for the ARV at the time of purchase. The policy should have a pending improvement clause in it.

What you state is good to know, but misses the point.
It's very, very rare for a title company to miss who actually owns a property. This whole thing could have been avoided if she'd had a title search done and had title insurance. She wouldn't have spent the $17,000 to purchase the property in the 1st place (and, in addition, the article says it was by Quit Claim Deed, not Warranty Deed. ) Big, mistakes. If it was in my courtroom, since she is an experienced investor, I'd have to go with the defendant and dismiss her claim on summary judgment.
She was trying to do things on the cheap, she knew better and this isn't a good place to cut expenses.
Just stating the obvious for all the newbies that don't know better.

I didn't miss the point Mike, rare is a subjective term. Based on my experience doing title insurance claims for awhile it happens more frequently than you might imagine. I've previously posted links to title related lawsuits that you can read if you're interested. In my opinion, errors are happening more frequently because of changes in the way title searches and exams are being done. Many underwriters have sent much of the work offshore to countries where private land ownership is rare and title insurance is non existent, think Philippines & India. I think it is very difficult to learn a system that is completely foreign and of course the work is being sent offshore to save money. Almost by definition that will result in lower quality. Currently there are several underwriters selling a policy where the search and insuring decision is done by an algorithm, I suspect that will make title mistakes even more common.

My landlock claim was with Chicago and I am wondering if at the time they had sent their title work to the Philippine's I know many do that here on the west coast. the one I just had last year in Indy was Fidelity I believe .. Local small attorney owned closer who sold insurance for fidelity.

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Shelby LeBlanc
Flipper/Rehabber · Houston, TX · Member since 2020 · 88 posts · 59 votes
5y
@Steve Vaughan She says everything is clear as she has owned it for approx 20 years. No divorces or deaths as she is the sole owner. I am going the safe route and closing with a title company. Not willing to take any chances. It’s business and I am paying the closing costs anyway. A cash transaction will be minimal closing costs. Thank you for your input!
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