Has anyone tried getting title insurance on a property they bought in a tax or mortgage foreclosure by a quit claim deed? If so, who did you use?
The response I got in my area is that title companies won't insure title on such a property until the new owner holds it for 1 or 2 years after purchase. Has anyone been able to get title insurance sooner, specifically in New York State?
The intent behind the question is either a bank refinance or a re-sale to a buyer using conventional financing (i.e. both of which require insurable title). Thanks!
Mtg foreclosures and tax auctions are two different animals.
Generally you can get title insurance immediately after a mtg foreclosure, absent any redemption periods, and assuming it was a 1st mtg, no HOA debts if they remain.
Tax foreclosures generally require either a Quiet Title action or an extended holding period, 2-5 years, which is state specific.
Another option for tax foreclosures is to use a service such as offered at TaxTitleServices.com. Faster and often less expensive than a quiet title action. They chase down all the potential redemptioners and/or others who might challenge the property transfer, obtaining quitclaim deeds and/or other solutions. The company's title partners (particularly First American) accept the resulting certification and will thus insure title.
Good info. We’ll check them out. Thanks Jim!
@Jim L. I don’t think they track down everybody and get QCD’s.....they just review the tax foreclosure records, verify everyone was properly notified, take the risk for any errors they didn’t find. The problem is, the Next buyer may can not get title insurance, other than going thru them again.
Thanks, Wayne. In our case, we would be looking to get title insurance so that we can refi private financing and obtain long-term institutional financing. We are not looking to sell it right now as it will be a cash-flowing rental once the rehab is complete. As long as the bank will accept this title policy, it is sufficient for our purposes for now. Down the road, according to all of the mainstream title companies I have spoken with, after we have owned the property for two years a subsequent buyer will be able to obtain title insurance should we decide to sell it.
@Wayne Brooks , according to Dave Schumacher, founder of TTS, they do at least track down all potential challengers and get sign-off. This at least speeds up the process, and one could pursue quiet title separately. In some cases they orchestrate an alternative exit (e.g., Trustee was not properly served notice, and wants the property, so they pay the purchaser more than they paid at auction.) I found this interview with Dave to be quite enlightening: http://buyingtaxdeeds.com/podcast-2/ It's possible I misinterpreted what he said, however.