Homebuyers who purchase a foreclosure may or may not get title insurance. It varies on a case-by-case basis, says Michael Waiwood, president of EnTitle Insurance Co. in Independence, Ohio.
"It goes from A to Z, (as) far as the industry's position" on insuring foreclosures is concerned, Waiwood says.
"We're not saying no, but we're very cautious," he says.
Orlando Lucero, attorney and vice president of Stewart Title of Albuquerque, N.M., agrees.
"I think the companies are going to be looking at them much more closely," he says.
And, in many cases, it makes a difference if you're buying from a bank or on the courthouse steps. It also matters if you live in a judicial foreclosure area or a nonjudicial foreclosure area.
Another factor: Which institution foreclosed on the property? Did the owner have a lawyer? And is the institution willing to indemnify the title insurance company against any mistakes it made during foreclosure.
"Going forward, title insurance companies are going to be looking at banks to provide indemnification to the title insurance company," Lucero says.