Buying a foreclosed property? You may not be able to get a clear title. According to the New York Times and CBS Money Watch.com, Old Republic is no longer insuring titles of properties foreclosed by Chase. According to the Source of Title.com website, Old Republic’s policies actually affect all properties foreclosed by GMAC/Ally. Basically, Old Republic is stating that they do not have faith that the court rulings on these foreclosures won’t be overturned — and they don’t want to get stuck paying thousands per house in legal fees.
If title to a property can’t be guaranteed and insured, then properties run the risk of not being able to get financing. The ability to finance a property directly impacts its market value. This is nothing less than a crisis of faith in the government’s ability to deal with the fallout of the mortgage market collapse.