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Albert Marmero
Albert Marmero,
Category: Real Estate Law
Satisfied Customers: 175
Experience:  Partner at Long, Marmero, & Associates, LLP
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I closed on a house on 6/29/16. This morning, I received a

Customer Question

I closed on a house on 6/29/16. This morning, I received a call from the title company that handled the closing, informing me that the wire transfer to Flagstar bank (seller's mortgage company) was rejected that same day, but the deed was filed with the court that morning. The title company rep told me that Flagstar said the payoff was rejected because the property went into foreclosure (allegedly unbeknown to the seller, and the title company) and that I owe an additional $3230.00 before the title to the property will be released. Is this my problem or the title company's problem?
Submitted: 3 months ago.
Category: Real Estate Law
Expert:  Albert Marmero replied 3 months ago.

I have dealt with situations similar to this, although not the exact same set of facts, and my opinion would be that this should generally be covered by your title insurance policy. The purpose of title insurance is to insure that clear title to the property is passed on to you and it is the responsibility of the title insurer to discover any potential title issues and ensure they are resolved before, or at, closing. Of course, different title insurance policies contain different exceptions, but generally this issue should be handled by your title insurer. I would immediately notify your title insurer of this issue and ask them what their plan to resolve this is.

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