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I am buying a foreclosed property (CONDO) from Fannie Mae…

for NJ: I am buying...
for NJ: I am buying a foreclosed property (CONDO) from Fannie Mae (thru homepath.com). I am not using an attorney and I am using title company whose name is ***** ***** Fannie Mae as in such case they provide free title insurance. They said they will give "Bargain and Sale" deed. The title company has said that below Exceptions will stay under Schedule B-Section II:
1. Notwithstanding any provision of the policy to the contrary, the following matters are expressly excepted from the coverage of the policy, and the Company will not pay loss or damage, costs, attorney’s fees or expenses that arise by reason of any encroachment, encumbrance, violation, variation, or adverse circumstance affecting the Title that would be disclosed by an accurate and complete land survey of the land.
2. Right or claims of parties in possession of the land not shown by the public record.
3. Any liens on your title, arising now or later, for labor and material, not shown by the public records.
4. Subject to possible additional taxes assessed or levied pursuant to N.J.S.A 54:4-63.1 et seq.
5. TAXES, CHARGES AND ASSESSMENTS: The payment of all taxes, assessments, water and sewer charges, up through and including the current instalments.
6. Terms, conditions, easements, restrictions, covenants, limitations and provisions, including lien and assessments rights, as set forth in a certain Master Deed for Highland Arms Condominium, recorded in Deed Book 3747 Page 175 and any amendments thereto.
7. Possible lien for future condominium maintenance charges pursuant to N.J.S.A 46:8B-21 et seq., the New Jersey Condominium Lien Law.
8. Right of adjoining owners, mortgages and tenants, together with the insured, in and to the party walls separating the subject premises.
9. Provisions as contained in the Condominium Act L 1969 CH.257, approved January 7, 1970, N.J.S.A. 46:8b-1, et seq.
MY QUESTION IS
(a) DOES HAVING ABOVE EXCEPTIONS CONSTITUTE A CLEAR AND MARKETABLE TITLE
(b) CAN I FACE ANY PROBLEM IN FUTURE BECAUSE OF THESE EXCEPTIONS.
(c) WILL I BE ABLE TO SELL THE PROPERTY IN FUTURE IF ABOVE EXCEPTIONS ARE THERE WHEN I SELL ALSO.
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Answered in 15 minutes by:
11/14/2015
Barrister
Barrister, Lawyer
Category: Real Estate Law
Satisfied Customers: 43,597
Experience: 17 years real estate, Realtor. Landlord 26 years
Verified

Hello and welcome! My name is ***** ***** I will try my level best to help with your situation or get you to someone who can.

.

MY QUESTION IS (a) DOES HAVING ABOVE EXCEPTIONS CONSTITUTE A CLEAR AND MARKETABLE TITLE

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No, they are stating that they aren't guaranteeing that there aren't any encumbrances, only that they have title, and not that any future problems won't come up with the title. However, they are basically saying "whatever we own right now, be it 0% or 100%, we are conveying to you". This is typical in foreclosure deeds because they have no idea what the title looks like or what the history is. But the foreclosure sale would typically wipe out any liens or encumbrances on the property as a matter of law so that the property title is clear after that.

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(b) CAN I FACE ANY PROBLEM IN FUTURE BECAUSE OF THESE EXCEPTIONS.

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If you own the property for a while, then the longer you own it, the less important those exceptions would be simply due to the statute of limitations on anyone ever trying to challenge the title. But it would be a very good idea to have a title search done on the property and get a title opinion from an attorney or title company as to what they think about the title.

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(c) WILL I BE ABLE TO SELL THE PROPERTY IN FUTURE IF ABOVE EXCEPTIONS ARE THERE WHEN I SELL ALSO.

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It makes it less marketable, but you can sell it with any type of deed you want.. You can sell it with a General Warranty deed if you want...it just makes you liable of there are problems with the title later with the buyer because he can look to you to defend his title. So if you hold the property for ten years and have no issues come up with the title, it is probably pretty safe to sell it with a GW deed.

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As an aside, I used to be a closing attorney for 4 different lenders and title companies..

.

.

thanks

Barrister

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Customer reply replied 2 years ago
Thanks Barrister. Yes, this title company did the title search and only came up only with $13K lien (from housing association) which will be cleared by Fannie Mae (seller) before closing. Since I am using this title company referred by Fannie Mae, I am not sure if they are doing in my best interest. They have verbally said it will be clear and marketable title, but than they will have the exceptions as listed by me previously. I am attaching the full title document they sent me.If title search shows only 1 lien which will be cleared, if foreclosure clears any liens and emcumbrances, and than I will be given ALTA Owner's Policy (2006) --- than WHY SHOULD THERE BE ANY EXCEPTIONS AND WHY SHOULD THERE BE ANY PROBLEM FOR ME IN FUTURE.

The reason is that banks don't like risk... So they will disclaim anything they can to get out of incurring a potential risk. For example, someone forged a deed back down the line and then someone comes forward and files suit saying that they never signed off on their interest in the property... There is absolutely no way to predict if that will happen, so they issue the bargain and sale deed to get out of any potential liability.

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But I have been a real estate investor for over 26 years and have purchased dozens of properties after foreclosure from the bank and have never had a problem with the title or with selling them later. So purchasing after a foreclosure is a pretty good way of ensuring that you have a clear title because the foreclosure wipes out most potential claims..

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So I never worry about buying a property from the bank after a foreclosure sale.. In fact, I closed last Monday on one to add to my investment properties.

.

.

thanks

Barrister

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Customer reply replied 2 years ago
Thanks Barrister, I appreciate your detailed responses.So as I understand, you are saying with those exception listed, and all liens that came in title search being paid and I getting an ALTA Owners policy --- (a) I don't have anything to worry about ? (b) Any problems that may come, I am covered ?

I can't say that you don't have anything to worry about, because there is always some degree of uncertainty in a deed. Like the example I mentioned earlier with the forged deed. But these are rare and hardly ever occur, as in probably less than one half of one percent..

.

And you would be covered to the extent of the owner's title policy, barring any exceptions. But if the title search came back as clean as it did with only the one lien that will be paid and released, it is unlikely that something else will pop up out of the blue down the road..

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But if I were a betting man, I wouldn't be too worried about this bet.

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If you feel your original question and any related follow ups have been answered, I would very much appreciate a positive rating on the answer I have provided so I receive credit for my work. If you have a new question the JustAnswer folks require that you start a new question page, but you can request me by putting "For Barrister" in the caption and they will get it to me.

.

.

thanks

Barrister

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Customer reply replied 2 years ago
Sorry Barrister, one last final. If you were providing me title opinion, there is nothing you will change considering the situation.I am very impressed with your responses, You get five stars. I will rate you at the right place on Justanswers.

Considering the title search as it is, then no, I wouldn't change anything. A title opinion is just an attorney's review and interpretation of the title search and whether there is anything that stands out as something to be concerned about. It looks pretty standard to me and doesn't raise any red flags as long as that $13K lien is paid and released.

.

.

thanks

Barrister

Barrister
Barrister, Lawyer
Category: Real Estate Law
Satisfied Customers: 43,597
Experience: 17 years real estate, Realtor. Landlord 26 years
Verified
Barrister and 87 other Real Estate Law Specialists are ready to help you
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Customer reply replied 2 years ago
Barrister, If I need your services in future for (a) Title Review and Working with Seller for Title related only(b) Closing / Other matter (no review of contract, no inspections) -- what will be your fees in each of these scenarios. And how would I contact you. Thanks again.

Unfortunately, I am not allowed to represent customers from the site or recommend anyone personally under my agreement with JustAnswer. I am limited to just answering questions and providing information..

However, these are a couple sites that we attorneys actually use if we need foreign counsel in a state where we aren't licensed. Further, customers have consistently reported good results with these sites:

.

www.martindale.com

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www.lawyers.com

.

They screen their attorneys based on geographic location, area of practice, time in practice, cost and customer reviews. You would just be looking for a real estate or closing attorney to assist

.

If you ever need me in the future, you can just post a new question with "For Barrister" in the caption and the JustAnswer employees will get it to me.

.

.

thanks

Barrister

Ask Your Own Real Estate Law Question

Thanks very much for the positive rating and bonus, it is greatly appreciated!

.

It was my pleasure to work with you and help with your question. Please feel free to ask for me personally by putting “For Barrister” in the question if you need help with anything in the future and I will do everything I can to help or get you to someone who can.

.

.

Barrister

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