Many banks are foreclosing on homes or taking ownership of them by a deed in lieu of foreclosure. One question that has come up is whether the bank has continuous coverage under the Mortgagee Title Insurance Policy from when the mortgage was originated. This can be important if title problems are discovered after the bank has already taken title to the property.
Paragraph 2(a) of the 1992 ALTA mortgagee policy Conditions and Stipulations states in part:
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We have a lot of real estate in Florida where people drive over private roads to get to their property. Then, when they want to sell the property, there is a title problem. The seller always asks, “Don’t I have a legal right to use the road if I have been using it all these years?”
The dirt road has probably been there for many decades …as long as people can remember. It may even be on their survey from when they bought the property … or from when they subdivided the property … or from when they did their land-home package to buy their mobile home. There might even be a description of the road included in the legal description of their property on their old deed or mortgage.
So, how can there still be a title problem? What if the property appraiser or the court house says it’s OK? Is there still a problem?
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