Insuring titles that have come through a sheriff's sale should be approached with the utmost caution. These titles may be insurable but in all cases you should review the matter with an Old Republic Title underwriter.
At the minimum we want to see that the title meet the requirements of Massachusetts Conveyancers' Association Title Standard No. 20. Even if the title passes this standard it may not be considered insurable.
The constitutionality of sheriff's sales has recently been questioned. See Teschke v. Keller, 38 Mass.App. Ct. 627, 650 N.E.2d 1279 (1995). In this case holders of two mortgages challenged the sheriff's sale because, although the sale had complied with the statute, no notice of the sale other than publication and posting had been given to the mortgagees. The court agreed that there was sufficient state involvement with the sheriff's sale procedure to bring it under the provision of the Fourteenth Amendment to the United States Constitution which prohibits the taking of property without due process of law. The court found that the procedure under the statute for sheriff's sales because it does not require notice to be sent to junior lien holders violates the Fourteen Amendment. This case gives us one more reason to approach sheriff's sales with extreme caution.
It is interesting to note that the court procedure called for in Title Standard No. 20 is a writ of entry under M.G.L. c.237 and not one to quiet title under M.G.L. c.240. This is a recognition of the decision in the case of Gilman v. Gilman, 171 Mass. 46, 50 N.E. 452 (1898) that held that a quiet title action would not lie under M.G.L.c. 240 in the case of a sheriff's sale, since the title was not "clouded" by reason of the sale. As a result the court in Gilman concluded that it was thereby stripped of its jurisdiction to hear such a case. The writ of entry, therefore, would seem to be a substitute effort to get some judicial recognition of the propriety of the sheriff's sale.