REO Buyer Can Select Escrow and Title
This is a good change!!! Most of the REO’s that I’ve been dealing with have banks that put buyers under a lot of pressure to work with the bank’s (who is the property owner) preferred escrow company or their offer doesn’t get accepted. It’s been a play by the bank’s rules if one wants the property. The alternative is to work with the bank’s title company but ask the lender to pay the title fees. (For clarification, when I refer to bank, I’m referring to the bank who owns the property (REO) and is the seller).
One word of advice if a buyer is agreeable to working with the bank’s title company is to NOT USE that title company if it isn’t located in the same county or very close to the county where the property is located. My worst REO escrow resulted from the bank’s escrow company which was based in Southern California. There were nothing but delays, miscommunication, and mishandling of my clients file. Never again!!!! We closed but it was a bumpy, aggravating ride for everyone.
Details on the new law:
Effective October 11, 2009, the Buyer’s Choice Act prohibits an REO lender selling residential property up to four units from directly or indirectly requiring the buyer to purchase escrow services or title insurance from any particular company. A buyer, however, who has received written notice of the right to make an independent selection, may agree to the REO lender’s escrow or title recommendations. An REO lender that violates this law can be held liable for three times the charges the buyer incurred, whereas a violation by the seller’s agent may be subject to license disciplinary action. This law expires on January 1, 2015. Assembly Bill 957.
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