Title Insurance for REO

[Tyshaun Golding]

I'm a new investor and wanted to know if I should purchase title insurance for a REO im going to buy from auction.

[Lynnette E.]

I would.  Not only do you need to ensure that the liens are cleared but that the title is clear.  With foreclosures often one bank transfers the deed to another to an attorney and so on until eventually one company forecloses.  Often that paper trail showing that the transfers were done correctly, that there were power of attorney documents for the one making the transfers or sales, is missing one of the links.  Some people are very careful, but often someone was careless and the paper trail is missing something.  Once you own the house, you will not be able to sell it if that paper trail is not clear, and you have no leverage to fix it.  When buying it and getting title insurance, you have the leverage to get them to add the missing paperwork.