Title Insurance question?

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Title Insurance question?

We purchased a foreclosure from Countrywide 2 months ago. We recently received a Notice of Default from a bank that held a loan for $15,000 owed them by the old homeowners. The house was foreclosed 10 months ago. I assumed this debt on the house would have been wiped out by the foreclosure. I contacted the bank and they said they were never notified by Countrywide about the foreclosure. Can our new home be foreclosed on by this bank? I assume this a problem for my title insurance to handle. Is that correct?

Asked on June 7, 2009 under Real Estate Law, California

Answers:

MD, Member, California Bar / FreeAdvice Contributing Attorney

Answered 12 years ago | Contributor

Your life insurance has nothing to do with this.  If you mean title insurance, yes.  Also, did you get a title search done prior to purchase or make it a condition of the sale? Was the second loan recorded? Your purchase should or seems to be the first position loan, which theoretically would wipe out the secondary if the secondary didn't secure its position.

So, better contact your title insurance company.  If that fails, try the California Attorney General Office and the California Dept of Financial Institutions if the latter agency regulates the bank claiming the $15,000 loan.

If all else fails, contact a plaintiff's real estate attorney at www.attorneypages.com and check his or her disciplinary record at www.calbar.ca.gov under attorney search.


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