There are federal laws that lenders (banks) must follow after foreclosing on a home and clearing up liens for a clean title are one of them.
Also, when your contract is accepted and sent to title, the Title company will perform an in depth title search and history for that property. If any thing arises, it is paid by the lender at closing. The Title insurance you get is the policy that will cover you if any thing strange arises in the future after you have purchased your home.
I highly recommend hiring a real estate agent to help you with this process, and one that has experience in REO's, such as myself! I would be honored to help you with your home search and provide daily information on new REO's that hit the market.
Since there are less coming to market, the majority of them end having multiple offers with the home going to the highest offer.
Please feel free to visit my website to learn more about me.
Ebby Halliday Realtors
Mobile Site: m.sherryrenfroe.com