When you’re buying a home, you fork over some cash to pay for title insurance to cover your butt in case there are any existing liens on the property. But what do you do when your home ends up in foreclosure because the company that’s supposed to be providing that insurance screws up royally and then tells you not to file a claim?

This is the ordeal that a Washington state have been going through over the last few months.

They purchased the home about a year and a half ago and thought all was well and good. But then this summer they first received a notice of default addressed to the previous homeowner and then came home to find a document taped to their front door letting them know that their house would soon be going up for auction in order to pay for a lien against the property.

The husband called the trustee behind the notice and says he told him, “Listen, you have the wrong person. We bought our house fair and square. We didn’t have any lien against it.”

No, they didn’t. But the previous owner did. And the escrow company should have paid off that lien back in 2010. So the husband then contacted them to find out what the deal was.

“And they said, ‘Don’t worry. We’re aware of the situation. Our legal department’s working on it,'” he tells KOMO.

He says he wanted to file a title claim but the escrow company told him not to worry. But that was back in August and the November 1 auction date was approaching with no resolution in sight.

Making matters worse, he found out that the credit union that holds the lien has been trying to get their money from the escrow company for several months before it posted the auction notice. And the trustee tells KOMO he wrote the escrow company in June about the pending foreclosure and got no response.

As usual, once KOMO got involved the escrow company sent out a check to the trustee within 48 hours.

Mistake by escrow company almost costs couple their home [KOMOnews.com]

Thanks to Chuck for the tip!

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