REI Wealth Monthly Issue 13 | Page 9

TAKING TITLE GARRETT SUTTON While often advocated by promoters as the easiest to the property. It doesn’t, because neither you nor means for transfer, the quit claim deed is not your the bank really knows what those rights are. best choice. First, know that in many bank involved REO (real estate owned) transactions the REO lender selling a foreclosed property will only use a Quit Claim deed. Why is this? It is because the lender has no idea what happened on the property prior to foreclosure. During the boom, documents were not properly kept or transferred, the banking industry’s MERS electronic recording system failed to keep up with it all, and many documents were just plain lost. This is no way to maintain a good chain of title on the nation’s real estate. It was so bad that in 2009, a large national title company announced it would no longer issue title policies to two large national banks. These lenders’ records were just not trustworthy, and the title company was not going to To further get themselves off the hook after taking take the risk. Know that for years to come there your money for the property, these banks will bury are going to be title issues arising from the real the fact that they don’t warrant good title in an estate collapse in 2008. Addendum at the end of a sixty page contract. They want you to waive any rights you may have in It is for this reason that sellers (mainly banks) of the matter. They may or may not know that the title foreclosure properties are using quit claim deeds. is so defective that the property will be severely They don’t know what happened and they aren’t devalued. But they want you to release them from about to warrant or guarantee that they have a any future problems and sign off that everything is clean title to convey to you. The quit claim deed okay. There have been reported cases where the they use instead says, “We don’t know what we’ve Addendum is intentionally withheld and only got but whatever we’ve got we’re giving to you.” provided to you at the closing. (You know, at that last meeting at the title office where you are What is offensive is the lengths that some of these expected to sign 47 documents without reading lenders will go to get you to bite on a quit claim them.) Accordingly, please be very careful and deed. They will tell you that it grants you full rights have your own attorney review such transactions.