Keller Williams Realty Atlanta – Peachtree Road

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Real Estate Legal Tip

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Buying a Foreclosed Property:
Does the Bank Have Title to the Property?

If your buyers find an REO (foreclosed = Real Estate Owned) property that they really want, it is a good idea to confirm that the previous foreclosure has been recorded.
 
Because of the high volume of foreclosures and threats of litigation for wrongful foreclosure, lenders are not getting their foreclosure deeds (DUP – Deeds Under Power) signed and recorded in a timely manner.  Lenders are taking extra time to confirm and review their procedures before executing the DUP and returning it to the foreclosure attorney for recording.  If any mistakes are found, the entire process may have to be repeated, including the advertising period of 4 weeks.
 
If the DUP is not on record when a property goes under contract, the buyers could end up waiting weeks or months beyond the original closing date.  These delays may require amending of the contract, rearranging moving plans, and relocking of loan interest rates, in addition to the stress of uncertainty and the difficulty of getting information or communication from the REO seller.
 
Most REO sellers will designate an attorney to represent them in the closing, even if the buyer’s or lender’s attorney is handling the closing.  The seller’s attorney should be able to obtain and provide information on the status of the unrecorded DUP.
 
If the DUP has not been signed and recorded (or delivered to either the seller’s attorney or the closing attorney), this is a title problem that must be cleared before a closing can occur. 

Presented By:
 
Leigh Clack, Attorney     lenox@neelandrobinson.com
Neel & Robinson Attorneys at Law, LLC
22 Lenox Pointe,    Atlanta, GA 30324 
404-705-3690      fax  404-705-3697

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