Can title insurance save your home?

Should I worry if I've purchased a foreclosure?
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Should I worry if I've already purchased a foreclosed property?

Probably not. Experts generally do not expect courts in the vast majority of cases to start handing homes back to former owners as a result of the flawed foreclosure issue.

"I think you have some due process issues, but the reality is most people would not have a defense to the foreclosure," Lucero says.

However, there could be claims.

"The owners who were foreclosed on may have a legal basis for claiming they may have some equity left in the house which may not be recorded, says Joseph W. Eaton, co-author of "The American Title Insurance Industry."

That's where an owner's policy can come in handy.

If you bought a home in good faith, the courts likely will honor that -- either by making sure you're not out any money or by letting you stay in the house, Mann says.

It likely would require additional factors in the original mortgage or foreclosure -- such as fraud -- to justify giving the home back to the previous owner, he says.

Even in that instance, a bona fide purchaser "should be restored to their position before the sale," Waiwood says.




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