Thanks to all who posted a response to this inquiry.

After several sleepless nights over the long holiday weekend, I was able to discuss this issue with the title company. They agreed to insure as long as I produce an affidavit from someone with personal knowledge that the defendant is not in possession of the property!! Since the property is vacant, this will be no problem and it looks like this issue is resolved (let's hope nothing else comes up at closing.)

The answer that you are looking from should come from your attorney. In addition I can not see a title insurance company issuing a policy with this apparent liability. Again take your advise from your attorney. Good luck

Let me see if I got this right...

They expect you to pay money for a house. But that house is owned by someone else who could claim it any time within 5 years?

No way I would touch that deal. I want what I pay for to be mine and mine alone. This looks far to messy, not to mention potentially financially destructive for you.

Newbuyer
Either it must be insured with this issue under the title insurance or they must get it signed off. Leaving it to chance... may not be worth the risk. Ask your attorney, listen to his advise and then see if it resolved your concerns. If it does not... do not move forward.

More importantly to you should be...What was your attorney's opinion on this?

Bob Sendel

I am a Realtor & Attorney licensed for both only in OH. So things I say are my personal opinions, not any type of legal adivice or real estate advice. You need to consult an Attorney who handles residential real estate matters, before you move forward with this purchase. From your description, it appears that the Bank's Attorney made a mistake in the foreclosure process by not making sure that all defendents had personal service. Since you are located in NY, I can only guess what it might be. It might be a lien that expires in 5 yrs if the lien is not renewed by the lienholder (the defendent in this matter). Again, this is just a guess & my personal opinion, but that lienholder might be able to renew that lien in 5 yrs & then what ? And, do you know how much money is at stake? Why isn't the Bank offering to pay it off, so you can obtain clear title? Again, you need to consult an Attorney licensed in NY who handles residential real estate matters, before you move forward with this purchase.

All great answers but where on a title report would show personal service ? As long uor titl company grants u a policy and u have written confirmation from them and there issured then game on!

They should get it cleared. They can get a release from that person.

What happens in year 6? You may be out lots of money to clean it up.

If you can get owners title insurance that covers this issue, than i would close. if the owners title insurance wont cover it, then you need to seek the advise of a real estate attorney who can explain to you the spoecific law for NY that may or may not affect the title and future ability to sell. good luck with working things out