i am a realtor and we dont have the knoldege or ability to provide such complex answer.
i dont know what the contract that the bank make you sign, most of the people eager to buy sign those difficult to understand addendums and then the problem starts. if the contract is not a standart contract you should seek attorney representation.. Because you are paying cash thiese title exceptions wont be seen by a loan underwriter..and also sometimes banks rely on the title company . Probably the bank is paying that so they are using their own attorneys to reresent them , You should find yours .
With respect to the fact that the seller is a subsidiary of Lehman Bros will also not be a risk. Title insurance guarantees your right of ownership.
With respect to the exception for "any rights or assert right of creditor, trustee or debtor in possession in bankruptcy . . .' I would seek an explanation from the title company. If the explanation is not satisfactory, you may choose then to consult an attorney.
Jeffery P. Woo, Esq.
Sedgwick, Detert, Moran & Arnold, LLP
Complex Rental Property Group
Then if you have further questions contact an attorney. These issues involve contracts and liens that a real estate agent might be able to interpret for you but if they are wrong they are liable. Better to have the policy in place that if there isn't clear/marketable title the policy is ready to pay your loses.
It is very common on REO properties to see various liens on the preliminary report. Clearing liens on the property can take some time and often new liens will pop up.
Yes, the banks do clear all liens before transferring title to the buyer. This has been the practice I have seen on all the REO transactions I have been involved with.
If you would like some piece of mind regarding the lien situation I would suggest you speak with the Realtor who is representing you to verify that the liens will be cleared.
I hope this helps!
Alain Pinel Realtors