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We bought a foreclosed property from a bank in early 2010. Given the current headlines regarding affidavit problems, do we have good title to the property?
It has now been disclosed that large numbers of foreclosure affidavits were improperly completed. In some cases individuals signed thousands of foreclosure affidavits per month without reading the actual claims being made while in other situations massive numbers of signatures were written by someone other than the alleged signer.
Could these affidavits create legal problems? Yes. Courts will be offended because the affidavits are supposed to have the same validity as sworn evidence. Look for fines, professional sanctions and perhaps even indictments in some jurisdictions.
Will the robo-signing debacle set off a new round of costs for lenders? Yes, many foreclosure affidavits will need to be audited to assure the information they contain is actually correct.
Will many foreclosures be reversed? No. Most foreclosures have been made for nonpayment, something easy to prove. However, it’s possible that some families lost their homes improperly, that the unread information in an affidavit was factually wrong. If that’s the situation then former property owners are likely to seek damages.
Could there be title issues with a purchase directly from a lender? It’s unlikely, but if you have title insurance you should be protected.
“Fraud and forgery,” says the American Land Title Association, “are examples of hidden title hazards that can remain undetected until after a closing despite the most careful precautions. Although emphasizing risk elimination, an owner’s policy protects you financially through negotiation by the insurer with third-parties, payment for defending against an attack on the title as insured, and payment of valid claims.”
As a real estate buyer you always want to save closing papers for tax, title and estate purposes. For specifics, contact your settlement agent, the title company or a local attorney who specializes in real estate. Get answers in writing – and keep them.
Peter G. Miller is the author of The Common-Sense Mortgage and a veteran real estate columnist. Have a question? Please write to email@example.com.View Foreclosure Article Archives
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