Title Issues causing Nightmare

[Harris Harris]

I bought a house in Austin, TX in July with full cash and spent about $60K renovating the property. I have a buyer for this property, and we are scheduled to close next month. My title company alerted me that the paperwork from my initial purchase of the property looks incomplete.

This property was bought using double closing.

1) Seller A sold it to Wholesaler(Big company) using Title company A

2) Wholesaler sold it to me using Title company B

I found the incomplete paperwork is with Title company A not recording the deed since the County rejected the POA for seal not being clear. The deed for the second closing from the wholesaler to my company was completed in July and recorded.

After my discovery of the issue, Title company A recorded the deed yesterday transferring the deed from the seller A to Wholesaler, but POA is not recorded yet in the county. They are working with the initial seller to fix the POA issue but I don't know how long it will take.

1) Title company B issued me the deed and owner's title insurance. Will I be able to claim the funds through the owner's title insurance? How fast or slow is this process?

Any other advice or suggestions that I should be doing?

[Tom Gimer]

@Wayne Brooks Here's my take on this... there is no "nightmare". Stop losing sleep. Nobody is collecting any $ from either title insurer or anybody else for that matter (unless there is some fraud involved). This POA problem -- a document affecting title not properly created, executed, witnessed, sealed, acknowledged, notarized, or delivered -- or some similar definition in the policy form at issue, is a covered risk. Everything is gonna work itself out.

The A-->B deed recordation (albeit late) fixes the chain issue due to the doctrine of after-acquired title.

So here's what happens next. Since the insured buyer is trying to resell, the title insurer on the B-->C transfer will step up and insure the next transfer while the POA recording issue gets resolved. @Peter Walther I think would be a good resource for more info as to how things like this work out.