How Does Title Insurance Work on an REO or Foreclosure Purchase?

What's the Difference Between a Foreclosure and an REO Property?

The terms get used interchangeably, but they describe two different points in the same process.

What to Expect When You Close an REO or Foreclosure File With Us

Whether you're a buyer, an agent, or an investor, here's how we handle these files differently from a standard resale.

REO & Foreclosure Title FAQ

Clear answers to the questions we hear most from buyers, agents, and investors.

• What's the difference between a foreclosure and an REO property?

  A foreclosure is the legal process a lender uses to take back a property after the borrower defaults on the loan. An REO, or real estate owned, property is what that same property becomes once the lender has taken title, typically after it fails to sell at the foreclosure auction. Buying at auction and buying an REO property afterward are two different transactions with two different risk profiles.

• Is Arkansas a judicial or non-judicial foreclosure state?

  Arkansas allows both. Most residential lenders use the non-judicial process when the deed of trust includes a power of sale clause, since it moves through notice and publication rather than a lawsuit. Judicial foreclosure is used when no power of sale clause exists, or when the lender chooses to go through the courts.

• Does a foreclosure sale in Arkansas come with a right of redemption?

  It depends on how the property was foreclosed. A non-judicial, power of sale foreclosure carries no redemption period once the sale is complete. A judicial foreclosure carries a one year statutory right of redemption unless it was waived in the loan documents, which can affect how quickly clear title can be insured. We confirm which process applies before a curative plan is set.

• Do I need title insurance to buy a bank owned (REO) home?

  Yes. Lenders typically clear outstanding liens and bring property taxes current before listing an REO property, which makes it a cleaner purchase than an auction sale, but issues can still surface later, like unresolved heirs, a second mortgage or judgment lien that wasn’t properly released, or a defect in how the original foreclosure was handled. An owner’s title policy protects you if one of these surfaces after you close.

• Is buying at the foreclosure auction riskier than buying an REO property afterward?

  Generally yes. At auction, liens can transfer with the property, interiors usually can’t be inspected beforehand, and a sale can potentially be challenged if the foreclosure procedure wasn’t followed correctly. An REO purchase happens after the lender has taken title and typically cleared major encumbrances, so the file is usually more straightforward to insure.

• Where are foreclosure and deed documents recorded in Pulaski and Saline County?

  In both counties, the Circuit Clerk serves as the ex officio recorder. Pulaski County filings are recorded through the Circuit Clerk and Ex-Officio Recorder’s office in Little Rock, and Saline County filings are recorded through the Circuit Clerk’s office in Benton. We handle recording as part of every closing.

• Do I need an attorney to close on a foreclosure or REO purchase in Arkansas?

  No, Arkansas allows a title or abstract company to handle the closing itself. REO and foreclosure files often need extra title curative work behind the scenes though, and our team works through liens, chain of title gaps, and other issues before they can delay your closing date.

• What happens if a lien or ownership claim shows up after I’ve already closed?

  This is exactly what an owner’s title insurance policy is for. It’s a one time premium paid at closing that protects your ownership against valid claims tied to problems that existed before your purchase but weren’t discovered until later, so you’re not paying to defend or resolve them out of pocket.

Areas We Serve

Based in Central Arkansas, with the reach to close REO and foreclosure files statewide.

Have an REO or Foreclosure File to Close?

Send us the file early and we'll start the curative work right away, so liens, ownership gaps, and foreclosure defects get resolved well before your closing date.