Foreclosure Buyers have choice of Title Company
October 12, 2009
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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. 

Properties foreclosed by banks are called REO's which stands for Real Estate Owned. Strange term, but that's what that is. Banks were sometimes demanding buyers of their foreclosed properties use the title and escrow company of their choosing.

However, in San Mateo County the buyers pay for the escrow fees in addition to the title insurance policies. Therefore, the buyer had always had the right to select which companies to work with during the purchase process. This new law re-establishes the buyer's rights to select their own companies and tells the Banks to back off.

This is important because sometimes even though escrow companies are suppose to be neutral third parties, they know who really brought them the business and some loyalties towards that person or company are created. When banks were diverting all their business to a single escrow company, I think we have to assume that the buyer might be at a disadvantage with the escrow company.

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Mark Martinho

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