Marketable Vs. Insurable Title

In response to our blog last week, most of the feedback we received involved questions pertaining to the quality of title that one might get if they acquire REO Property. The answer to this question is not simple. In a non-REO setting, the requirement is generally for the seller to deliver marketable title (i.e. title that is readily marketable and thus easier to convey).  Marketable title contains “standard”  or “customary” liens and/or encumbrances that most individuals would willingly accept.  Marketable title is the form of title that best insures that there will be no issues when one goes to sell the property.

 

However, in a normal REO transaction, the lenders will not commit to conveying marketable title, but instead endeavor to provide what they refer to as insurable title. Insurable title can be the same as marketable title or it can be drastically different, depending on the circumstances. …

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