Fannie Mae REOs are one of your best bets if you are trying to get that covered. They offer a program called Homepath that is 3% down and allows a seller credit up to 6% towards closing. Thats the cheapest way to get into an REO now days unless you are a veteran and qualify for VA which is 0% down. The only downfall with VA is the property must be in good condition. Homepath allows you to do a bit of fix it yourself due to no appraisal needed.
I have a team of lenders and contractors that specialize in Homepath, FHA, VA, and a program called FHA 203(k) which allows you to finance in repairs at the same 3.5% downpayment.
If you are referring to a Bank Owned Property, it all depends on how you write the contract. If you don't ask the seller to credit you any closing costs, then the Bank usually will pay the Title Fees, because they choose the Title Co. that will be handling the Escrow, and a few other fees.
If you ask the seller to credit you some money for closing costs, then that amount you ask the seller to credit you, will be paid by the seller at Close of Escrow. Of course the seller has to agree to pay the closing costs, when they receive you offer.
If you need assistance in finding a home, you found the right Broker.
Old West Realty Inc.
When you purchase a foreclosure such as at a trustee sale or on the courthouse steps) the buyer is purchasing subject to any and all liens and are responsible for all costs associated with the transaction.
If you are referring to an REO (Bank owned, already foreclosed), those homes can and should have title insurance policies (the buyer generally pays for this policy), but the transaction can have a "clean" title, subject to no impediments or undisclosed liens.
My advice is to contact a real estate professional prior to any real estate transaction. I am available if you care to contact me at (925) 407-7987.
Empire Realty Associates