I'm under contract for a Homepath house that I was going to flip.  I've done 18 flips.  In the past I've taken the "free" title work and title insurance offered by the seller (Fannie Mae).  I thought that title insurance was pretty much all the same.  For some reason, maybe because I saw this advice on BP, I decided to use my own title company this time.  This saved me $140,000!  The title attorney had worked on this particular property before and knew that the foreclosure wasn't done properly and that it would be very difficult or impossible to clear the title.  It's a unique situation that he's never seen before. Fannie Mae's title company has offered "affirmative coverage" which is not appropriate for this situation because the title will still not be marketable.  This means that I'd never be able to sell or mortgage the house!   

It really makes me upset that Fannie Mae knew about this and didn't disclose it!  I have a $10,000 deposit that they will probably try to keep but will not succeed because my agency is holding the deposit.  Also, the listing agent had to have known about this (it was under contract twice before and she didn't tell me why the sales fell through).  This is an agent who I know and am friendly with in the community and thought I could somewhat trust, yet she was willing to cause devastating financial harm to me and my family.

The bottom line is that nothing is ever free!