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January 16th, 2012

Part 2: Help! I’m stuck in an unsellable home



Money down drainBelow is the second portion of our two-part blog post, “Help! I’m stuck in an unsellable home.”

‘That’s what title insurance is for’

Owen Girard, senior vice president and claims center manager from Fidelity National Title Group (a unit of Fidelity National Financial Inc.), declined to comment on the Baxters’ case, citing company policy.

Girard also declined to comment generally on Fidelity’s policies and guidelines for handling any such claim in which a defect in title is discovered.

So what’s a homeowner to do when, like the Baxters, they find themselves truly stuck in a home that’s unsellable due to legal reasons?

For his part, a frustrated Baxter has taken his case to a lawyer.

Attorney Robert Garibaldi, who is now representing Baxter, says he’s “cautiously optimistic we’re going to get it resolved for him.”

“It’s in both parties’ interests to resolve this situation,” adds Garibaldi.

Asked how several surveys could have missed the encroachment issue and had property lines incorrectly drawn, Garibaldi said it appears that there were several liens “that were recorded improperly.”

“It happens in places where there’s a lot of vacant land and not enough sales to establish clear property lines.” Still, “this should have been picked up,” Garibaldi says. “That’s what title insurance is for.”

He added: “Typically, title companies do a lot of due diligence. They’re pretty careful on doing research and having title abstractors review things.”

‘I want to be compensated’

Asked how he’d like the situation to be resolved, Baxter ticks off a host of things.

He’d like Commonwealth/Fidelity to reimburse him for his legal costs, as well as the expenses he’s incurred trying to fix the encroachment problem. Baxter recently bought a municipal lien on an empty lot to the right of his neighbor in the hopes of acquiring that lot and doing a minor sub-division to resolve the encroachment issue. That has meant more surveys, title work and other acquisition costs.

Baxter also wants to be compensated “for all the aggravation I went through over the years.” And finally, Baxter says he’d like to be compensated “if there is any difference in the price when I sell my home in the future from what it sold for in 2010.”

“Contracts were signed but the sales fell through because of the encroachment,” he notes.

In the meantime, Baxter vows to continue to demand action from Commonwealth/Fidelity National Title, and to insist that the company honor its commitment to him or anyone else who might have purchased title insurance and later found a defect in their title.

“This has baffled my mind,” Baxter says, “on how they think they can get away with this.”

Did you read part one of this two-part post? If not, click here to read part one.

2 Responses to “Part 2: Help! I’m stuck in an unsellable home”

  1. Peter Says: January 16th, 2012 at 8:23 am

    Assuming Mr. Baxter’s title policy has an exception for survey matters he probably does not have coverage under the title policy. A title search will only find things recorded in the public records. Encroachments generally can only be found with an accurate survey. If Mr. Baxter received an inaccurate survey he should probably be talking with his surveyor and/or his/her E&O carrier.

  2. Incredulous1 Says: January 16th, 2012 at 11:06 am

    They can get away with it because realtors and lenders keep referring customers to them, even though they have a reputation for handling claims differently than the rest of the industry. I would think the department of insurance in the state this is occuring would be very interested in this story.

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Tim Manni is the Managing Editor of HSH.com and the author of their daily blog, which concentrates on the latest developments in the mortgage and housing markets.

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