Why You Want a Guaranteed Title
by Carla Hill
One word buyers and investors should familiarize themselves with is "title". When you buy anything -- a car, a house -- you want to be sure that you are gaining clear title. Simply exchanging money doesn't mean you have legal ownership of said property.
You may have been introduced to the term "quitclaim" deed. A quitclaim deed means there is no title covenant, or no guarantee of the title. Take it from the experts -- don't enter into one of these agreements.
Quitclaim deeds are only intended to be used by parties that know and trust each other, such as within a family. It should not be used during traditional sales and here's why.
A quitclaim deed means the seller doesn't guarantee that he/she actually owns the property! They are simply transferring whatever interest they have at the time of purchase.
In the still strong wake of the home foreclosure crisis, many owners are finding they've become the unfortunate victims of the robo-signing mortgage debacle.
According to RealtyTrac.com, the leading online marketplace of foreclosure properties, "The housing market has not completely escaped the clutches of this foreclosure crisis. Instead foreclosure processing delays in 2011 have artificially exaggerated what would have been a slow, natural decrease in foreclosure activity off the foreclosure peak of 2010. This artificial trough in foreclosure activity in 2011 will result in a corresponding double-peak in 2012."
These aforementioned "foreclosure processing delays" are direct effects of the robo-signing controversy, where documents had improper notarization and suspect signatures and are now being invalidated by courts, blocked by judged, and refused by insurers.
These weren't just small companies falling these procedures. Big names like Bank of America, JPMorgan Chase, and Wells Fargo were found to use these practices.
This scandal is nothing new. MSNBC reports that "Counties across the United States are discovering that illegal or questionable mortgage paperwork is far more widespread than first thought, tainting the deeds of tens of thousands of homes dating to the late 1990s. The suspect documents could create legal trouble for homeowners for years."
"Because of these bad titles, property owners can't prove they own the properties they think they bought, and banks can't prove they had the right to sell them," says Jeff Thigpen, the registrar of deeds in Guilford County, N.C.
Distressed properties were scooped up across the nation by eager, and sometimes less than thorough or honest, investment companies who then unloaded them without clear titles, legal notary, or proper signatures to unsuspecting buyers.
Many of these buyers who were impressed by the ease of purchase are now discovering that documents that must be officially signed and notarized had simply been "robo-signed", sometimes without even the right person's electronic signature.
Now, in order to sell with a clear title they must now do the legwork of tracking down signatures and filing paperwork that should have been handled by the mortgage investment company. This has led to contract cancellations and lost sales.
If you are looking to buy property in today's housing market, be sure to pay careful attention to dotting the i's and crossing the t's in your contract. Be sure that you are receiving a clear title done the old fashioned way with a guaranteed loan.
Copyright © 2012
Realty Times®. All Rights Reserved
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