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Newsletter - October 2008
 
In Distressed Property Transactions First American has the Solution
 
During market downturns title insurance adds real benefits when selling property assets, mortgage books or in covering an investor buying the assets.
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In recovery situations title insurance can be of benefit to banks selling repossessed properties. Our policy improves the salability of mortgage books or property assets by enhancing the banks' security. At the same time the security of ownership is insured when lending to a borrower who is purchasing the property asset from a receiver or in a distressed sale.
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An insolvency practitioner will not give much information and certainly not reps and warranties about whether the insolvent company actually owned anything they are selling or is not in dispute with neighbours/third parties etc.
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The practitioner will expect to sell at a discount to reflect this and the buyer will be expecting to have to take a chance because he is getting a bargain.
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Title insurance gives the insolvency practitioner the ability to offer the buyer a warranty, either by offering a policy or taking a policy themselves and then giving a warranty that matches what the policy gives them which should justify a better sale price.
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Alternatively the buyer can take insurance to replace the missing warranties and still get a discount on the purchase price, so getting a bargain without taking too much risk.
 

 
For further information please contact us at +852 2523 1028 or visit www.firstam.com.hk.