Special Warranty Deed & Foreclosures, what to look for?

[Xavier G.]

I am looking at a property in Texas that is in Foreclosure from a reverse mortgage company. The previous owner was a hoarder and my research seems to show that he was foreclosed on because of past due taxes (on top of not taking care of the house and getting the HOA on his back). The reverse mortgage LLC will sell this house with a special Warranty Deed which only covers their period of ownership. I have read that this is common in the foreclosure world. The Company foreclosing also chooses the title company as is also usual in this situation (from what I understand). My question is, how do I cover myself? Would an owner title insurance be enough? I will be paying cash. Thank you in advance!

[Jessica Jay-Maleski]

@Xavier G. I hope you don't mind but I was just about to post a similar question and thought it would make more sense to add my question to yours.

I am looking at a property in AZ (to rehab and flip). The current owner is an investor who purchased the home in 2011. He is indicating that he will only provide a special warranty deed. This is something I have not encountered - is anyone able to provide some clarity for Xavier and me?

TY! :)