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bank auction

we recently won the bid for a house in a bank auction.  when a title search was done by the lawyer for closing they found a lien on the house.  The selling mortgage company said the house was "sold as is" and they are not willing to cooperate and tell any thing except they "have a clear title"  What do we do now.  We can not close on the house with a lien on it.... 
  • September 26 2013 - Bunn
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Answers (2)

This is really a legal matter between the banks attorney and your attorney. 

I have the same problem with a Fannie Mae foreclosure.  However Fannie Mae is rectifying the problem because it was a cloud on the title.

The rules on auction properties may be much different from homes offered for sale with Realtors.  There may not be a recourse in your instance.  In real estate the term Caveat Emptor (buyer beware) always applies.

If the lien cannot be removed you should not proceed with the purchase as you will be responsible for the lien.
  • September 27 2013
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When they say they have "clear title", the Seller may mean insurable title or marketable title or something else. Seller's obligation and your rights depend on what the contract says and your attorney's interpretation of it. There are some instances where a lien is something a title company is willing to insure over. If Seller has "clear title", then they simply need to provide that documentation to the attorney who is providing the title opinion. Before you close, you should be very clear, based on your attorney's advice, what title you are getting, the to title insurance policy exceptions and how that affects your future ability to sell. If you appreciate an answer, please give thumbs up.  For the most helpful answer, please say thanks with a best answer click.
  • October 03 2013
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