REO cannot get title insurance

[Rich Hupper]

I have come across and REO where the previous owner still resides in the property. I guess the bank never evicted them. Either way the bank is trying to sell it with the people in there. I was told I would not be able to get title insurance for a situation like this which seemed odd. Anyone else ever come across an REO where you cannot get title insurance because the prior owners still live there? Do I need title insurance if the rest of the title is examined by an attorney and looks good?