Tip 7-2012: REO
(FREE Owners Title Insurance Is Never Free)
Prior Tucker Tips have
cautioned against the attempt by REO Sellers ("Real Estate Owned" by
the banks or Fannie Mae or Freddie Mac) to direct the Purchaser to use their
REO's attorney or settlement company. These practices usually include a
provision in the "REO Addendum" providing the Purchaser with a free
owner's title insurance policy if they use the REO Seller's settlement
agent.
NEVER FALL FOR THIS
ATTEMPT TO DIRECT THE PURCHASER'S CLOSING TO THE BANK'S SETTLEMENT AGENT.
Here's why this is a Bad
Practice:
1. In order to receive
the Free Title Insurance, the Purchaser must allow the REO Settlement Agent or
Attorney to represent both sides. This non-local law firm or settlement
agency gets all of their business from the Bank, Fannie or Freddie. They
want to represent the Purchaser so allegedly things will go smoother for their
main client - the REO Seller. If there is a conflict with the
closing - Do you really believe they will favor their new client (the
Purchaser) over their larger regular client (the REO Seller)? Whose real
interest are they looking out for?
2. This settlement agency
or law firm which normally represents the Seller is never local. They may
be from a nearby state like Maryland or from Virginia areas like Virginia
Beach. All communications with them and the Purchaser, the Lender and the
Realtor has to be through long distance, fax or email. The only time they
appear locally is when they send someone (usually a notary) to the area to
perform the signing of the closing documents. Is this a reasonable way to
obtain a smooth closing? Do you really want the Purchaser to close with a
notary at McDonalds?
Next weeks Tucker's Tip will
discuss the real economic costs of the closing and the "Free Owners Title
Insurance."
Contact me at 434-951-0858 or Tucker@TGBLaw.com
if you have questions.
Something Extra: Middle-aged
racking up student debt faster than any other age group.
William
D. Tucker, III
Tucker
Griffin Barnes P.C.
Charlottesville
434-973-7474 | Lake Monticello 434-589-3636
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