Title Company = Not responsible for clearing title?

Question

I purchased a home in a tax foreclosure a year and a half ago. I now have a sales contract on the table, and we are currently waiting on title work. I was just informed that there is an issue with title because the county didn't give proper notice to the mortgage company upon issuing the quit claim deed to me before auctioning it off. I called the title company to see what I should do, and they said they are not responsible for clearing title. Um, isn't that what a title company DOES? Now, we're at a stand-still with this contract. I'm going to try to figure it out myself (I used to work at a title company), but the title company is telling me I need to hire an attorney. There's no money in the agreed sale price for that.

My real question is, isn't a title company responsible for clearing title?

Account Closed · Answer

Had the title company completed their title search, and gave you a report that said the title was clear, and you purchased title insurance from them?  If so, it's their job to guarantee their report.  What does the title report and title policy say?

Jay Hinrichs · Answer

@Hannah Williams  if I read you correctly you bought a tax foreclosed property from the tax collector or whatever entity in your state handles delinquent tax's.  So you bought and took title WITHOUT the benefit of title insurance.

Your now trying to resell and title company won't insure because of what you described.

those are buyer beware sales.. they simply give you  a deed its up to you up front to discern  if there is any problems with title.  when we buy at tax sales and foreclosures we do a date down from title company on anything we are putting serious money out on.  Still does not insure you in case of error but catches the obvious

If its 18 months after the fact I suspect you will need to pay to clear title if indeed you even can..

Russell Brazil · Answer

If you bought title insurance you can make a claim to the insurance carrier. Though they insure what you bought it for, not what you put into it afterwards. If you did not buy title insurance then you don't have any recourse. What you would then need to do is hire a title attorney to attempt to clear the title. They may need to go back in and redo everything like it should have been done originally

Rick H. · Answer

Suggest you complete your BP profile and upload you face pix do we'll recognize you out of s crowd

Title company insured what you have, not what you want.

Real estate attorneys are in the business of clearing title.

Buying at a forced sale liquidation is all foreclosure is. Perhaps you thought you were buying something else?

I make a darn good living sorting out title messes that others create (including attorneys).

One way or the other, we get an education.

Hannah Williams · Answer

The policy says they have to clear title because a Discharge of Mortgage was never recorded and/or it was never discharged.