The Attorneys of First Class Title have worked in the REO (real estate owned, meaning properties that have been the subject of a foreclosure and are now owned by a bank) market since 1993. First Class Title, was formed to handle all real estate related transactions with an emphasis on REOs. Our attorneys and staff have decades of experience providing excellent service to buyers, sellers, servicers, real estate agents and lenders. By being efficient and response, we know how to please all parties and address any issue, whether legal or practical, that may arise in a transaction.
The review of foreclosures and handling REOs requires significant experience. We know and understand the complex rules and customs in Maryland, Virginia and the District of Columbia. Our years of experience enable us to resolve the most difficult problems and provide you with the assurance that you are getting an owner’s title insurance policy free from exceptions. We help Buyers, Sellers, Lenders, Realtors get transactions to closing that other companies might find impossible, and our experience enables us to resolve issues quickly and not cause any delay in settlement. Other companies may not be able to do this.
There have been many articles in the news and on-line about the rash of foreclosure “fraud” that seemingly is running rampant in courts across the country. Our job is to review the complete foreclosure file: this means every single document submitted to the court and other documents that are pertinent to the sale. This review of each file usually takes three to six hours. Some agents will advise you to avoid a title company that handles the bank’s assets as we do. I believe these agents are concerned about two things: (1) responsiveness and (2) insurability of title.
Responsiveness: First Class Title’s name creates a high level of expectation. The naming of this company was not taken lightly. This industry is all about customer satisfaction and repeat business. We strive to provide first class service.
We provide better service because:
WE ARE REGIONAL – We only service Maryland, the District of Columbia and Virginia and have chosen to remain in the tri-states only so that we can be experts in all real estate, foreclosure and lending issues in this geographic area.
WE SERVICE THE ENTIRE TRANSACTION –
We are hands on and solve problems rather than causing them or waiting for them to be resolved.
Our REO clients are treated with the respect and attention any client should demand of a service provider.
We also go a step further by providing superior service to all parties in the transaction as well. This helps the REO client by having everyone, most importantly the Realtors, feel positive about the seller client and therefore encourage them to sell or buy more of our REO clients’ inventory.
Insurability: If you close with First Class Title you can be assured that the most in depth review of title possible has been completed. A purchaser never wants to ever have a claim against their ownership. With an owner’s title policy, an insurer like First American Title or Fidelity National Title, is there to defend you and you are covered for your sales price. As a title agent, our liability is extremely high. We have constant bulletins, rules and regulations to abide by. If we fail to meet those guidelines or take short cuts, we are on the hook.
First Class Title will do everything possible to review every document, the timelines of the documentation, the signatures of the signers. When we are ready to insure you should be assured your title is clear.
USE OUR SERVICES: As a specialist in foreclosure review and REOs, we have conducted a full title search on the property in advance of the receipt of the contract. The search is over and above that which is conducted by the foreclosure attorney and is typically a 60 year search. We obtain a complete copy of the foreclosure file from the court and have already begun clearing outstanding items and unresolved past issues by working with the foreclosure attorney, the listing agents and our underwriters. Many REO contracts state that if you use the Seller’s choice of title company that the Seller will pay for the owner’s title insurance. As a result of being familiar with the Seller’s procedures title you will save time and significant amount of money. The title premium can be from $200.00 to over $2,000.00. The peace of mind you have knowing that an expert in REO is handling your sale and the satisfaction of saving money is a win-win.
For those Buyers who have elected to choose First Class Title’s services even though their agent may have has pushed to use their affiliated title company or an attorney with whom they regularly work, we are happy to provide to an independent attorney of yours to review our work. Usually the savings of the title premium far and exceed the outside cost for this and we are happy to work with any attorney. You have a right to choose and you should always assert that right.
REO – Marketable or Insurable Title
So you want to buy a bank-owned (REO) property. It is important to know the difference between “marketable title” and “insurable title”. Your sales contract addendum from your Seller will most likely state the Seller is to provide you Insurable Title. You must understand this is part of your contract because by signing the contract you are agreeing to this. Most Bank Owned Sellers will not provide you with marketable title.
General Rule: All marketable title is insurable, however, not all insurable title is marketable.
What is the difference? Insurable title may come with a host of defects. However, despite these defects, a title insurance underwriter weighs the risks involved and allows the title agent to issue a title policy even though there may be blemishes and potential problems down the road. Ironically, should the value of the property increase dramatically, the buyer is only protected to the extent of the original purchase price. However, a owner occupied Buyer is provided the extended policy that may increase to 150% of the sales price over five years. In contrast, marketable title is a title that is clean, has no defects that will come up again in a future title examination when the property owner attempts to obtain new financing or more importantly tries to sell the property. Accepting insurable title could result in problems which need to be addressed at a later date resulting in both time and money.
Why is this important? Some Title companies may gamble that the issue will not come up again or will be overlooked. When problems do come up later, these problems are more often difficult to resolve and will require corrective documents to clean up the chain of title. As with most problems, as time goes by the problem can become more difficult to cure. First Class Title will abide by the contract but will do everything feasible to provide marketable title regardless of what the contract states.
What does this have to do with foreclosures? Everything! The problem is that every purchaser who is looking for a good deal buying a foreclosure property is required to sign a contract that states to the effect “The buyer agrees to accept at closing ‘insurable title’ provided by the seller’s closing title company.” As we know, a great number of foreclosures are riddled with title problems. This past year alone we have encountered countless problems which required the lender to go back and either re-foreclose the property or obtain the necessary releases or corrective documents. While we may delay or even lose a transaction as a result of what we have found, we will not let poor or fraudulent work go forward. As a result, we cannot emphasize the need to have a title examination performed by an expert whose sole goal is to provide clear title for you.
At the end of the day, if you are buying an REO you should know that insurable title does not necessarily mean marketable title and we will provide you with a copy of your title binder at settlement or upon your request to see what matters have been investigated.