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For example HUD recommends that a buyer of the HUD foreclose gets a title insurance. Why? Isn’t that redundant?

Also, I know some lenders that require buyers to get a title insurance on a government foreclosure.
I understand that on bank foreclosure it is necessary to have title insurance. But why on a government foreclosure? My understanding was that all the lens are dropped when you buy a government foreclosure.

8 Thoughts on Do you really need title insurance on a foreclosed house?
  1. Reply
    lorraine
    February 28, 2013 at 2:14 pm

    YES, that way if anyone comes around and claims ownership you are covered, other wise you may have some large legal bills.

  2. Reply
    bob
    February 28, 2013 at 2:27 pm

    Dont be dumb dude……you need title insurance more on a foreclosed property, than any other.
    Dont try to save a few bucks by not getting any….you never know when some lien is going to pop up…..the only way you wouldnt, maybe….need title insurance is if you do titles for a living, and you have researched the house, and you know there are no liens

  3. Reply
    newmexicorealestateforms
    February 28, 2013 at 2:34 pm

    I have reviewed titles on property that have been foreclosed on and the lenders failed to mentioned all the parties with interest in the property for the foreclosure so you do the math.

  4. Reply
    Qyllix
    February 28, 2013 at 3:07 pm

    Yes, I bought a house two years ago that was a foreclosure. About 6 months ago someone started calling, saying that they had a lien on the property. Title insurance took care of it very quickly.

  5. Reply
    Jay
    February 28, 2013 at 3:23 pm

    Where’s the redundancy?

    There can be many liens on a house. Just because you bought the house in a foreclosure auction doesn’t mean that there aren’t other liens. In fact, a foreclosed house is EXACTLY the kind of house where you’d expect multiple liens.

    Get the title insurance. For yourself and for your lender (who will require it). Never buy a house without out.

  6. Reply
    annmarie
    February 28, 2013 at 3:38 pm

    Title insurance does a few things
    – insures the seller has a right to the property–that it is theirs to sell
    – insures that there are no undisclosed liens on the property,. You don’t want to pay off thousands of extra dollars when you take over the title, do you?
    – insures there are no open back taxes

    The mortgage companies and HUD require title insurance for very good reasons. Money well spent!

  7. Reply
    Kenneth D
    February 28, 2013 at 3:46 pm

    Title insurance is more important on a foreclosed home than any other. There are numerous title insurance problems that can be associated with a foreclosure. I have seen many, many incorrect legal descriptions in foreclosures; creditors (thus lienholders) omitted from the foreclosure process; and even on one occasion the entirely wrong property was foreclosed. In order to save the most money you should ask for the re-issue rate if that is possible. HUD just purchased a policy of title insurance on the property in question, you may want to go back to that title insurance company for your policy.

  8. Reply
    angel2005_2001
    February 28, 2013 at 4:27 pm

    Yes I work for a Title Insurance Company. You need title insurance on any property you buy. You must have a new warranty deed made out and everything. If not it would be easy for someone to make a fake deed, and claim your property. Without Title Insurance you would be out of that house and the money you invested in it because there would be no way to prove else way.

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