Title insurance lawsuits... can be retroactive?

[Brooke T.]

Hello Everyone,

I'm struggling to find a title agency to insure my seller carry back on a property I secured out of HOA foreclosure, but I know its just a matter of finding the right investor friendly company.

Through this process and talking with several different companies, I've been told more than once that the reason they don't insure HOA or Tax lien properties is because the owner could sue them over being foreclosed on due to this; as its 'not fair they lost their property due to such a small amount'.

Has anyone ever heard of anything like this before?? I don't understand how a title company can be held responsible for anything that happens after the policy, as it insures from the time it is purchased and any defects prior. I was told by one of the escrow officers that this was a big problem back in 2008, but am skeptical, as to me it makes no sense,.. any experience with this anyone?

[Russell Brazil]

Just have them issue a policy with an exception to this one situation, and you will have to take on the liability for that exception yourself.