BiggerPockets

Hi. A great start. The nexts step would be to find any leins and encumberancies on the property. A title search can do this but cost a 100 to 500. So doing this on ten properties only half going on auction the one that do might not meet your criteria because of the new information from the title searches. You may want to consider learning how to do the title search yourself. after all this information is stored in the public record at the county court house. I took a course for 160 dollars I do not want to recommend it just yet. but go to the recorder of deeds office. Match up any liens or encumberance related to that property. Do not look at everything for the last 50 years, just as far back as the last time the deed changed hands, because the bank most likely loan money on a clean title. So any liens in the current mortgage holders name is what your concerned with. I hope this helps. Please write back about your experince please to help my self and other

Anyone else have any ideas on this question ? please help

Okay this is how it goes. You have the list of foreclosures. You find properties with lots of equity. Then find out what else is an encumbrance on the property. What is being auctioned off takes care of that lenders debt, no one else's except if it a first mortgage, the second and third lose their equity in the property. Also you will have to pay taxes. there are a few exceptions. So if you see a tax lien on the property 9 out of 10 your paying that one when you get the property. So first check to see which place the mortgage is in. The first mortgage is the oldest. Then check taxes and mechanics liens. Once the property is yours from the bidding. Get insurance. Then start the eviction process. Its 3month for the stupid tenets 6 month for the smart ones. Oh if you can have the water turned off, that gets them out quick. Its not always possible in every state. That's is good luck.

That's very informative, Mr. Webber, thanks.

Originally posted by "Ryan Webber"

but any non-released liens filed before the foreclosing lien will stay on the title.

What happens when a second or third lien forecloses but nobody bids? Does that bank (or whatever) take title and responsibility for the prior liens? Also, what do banks do about unpaid taxes (especially property taxes) if they end up taking title, even from a first lien? Do they just have to eat them?

Correction on IRS redemption time frame - the IRS has 120 days to redeem after the foreclosure sale. Mudtruck - Ryan and Foleno are giving you good advice. Let me be more blunt. If you run down to foreclosure auctions based on the information in your " list" you are destined for a very expensive lesson. You need to understand every nuance of the foreclosure process and must be able to research title yourself. When you bid at sale you need to know with absolute certainty what liens are on the property and their priority.

Are there any ways to research titles on the internet Instead of going to the court house or wherever how do any investors out there do title searches for foreclosures your going to bid on?

<<<<<Hi everyone
Ok got a question for those of you who have purchased foreclosures. What process do you use before you go to the sheriffs sale and bid on a property. This is what I do Is there anything else I should be doing Like Title searches and so on If so how do you do it with out it costing the fee for a title search.
I Usually get my list each week go through and run prices for the area Im looking at. I find the propeties that would make sence for me to purchase.
Next I go and visit the property take pictures make notes on it . Then I go back and evaluate my notes and pictures.
And finally I,m off to the sale.
Is there anything I,m Missing. Thank you for your help.>>>>

Hi,

Here's a quote from one of my favorite books on tax deeds/sheriff sales:

1. Find comparable sales (you're doing this)
2. Make sure there's no encumbances for the lot
3. No environmental hazards (dept of health, zoning checks)
4. Make sure it isn't land locked
5. Make sure that there's no title problems (tax liens, etc.)

There's a bunch more but I'm tired of typing the checklist.

Originally posted by Foleno

... Match up any liens or encumberance related to that property. Do not look at everything for the last 50 years, just as far back as the last time the deed changed hands, because the bank most likely loan money on a clean title. So any liens in the current mortgage holders name is what your concerned with. ...

Although the quoted statement above usually holds, there are times when you will find liens still in place that pre-date the most recent owner's deed. And those would be considered as recorded earlier, thus pushing the most recent owner's liens into more subordinate positions. I observed a property go to sheriff sale in March 2008. As REO, it finally went under contract in March 2009 - but it had title issues and has yet to close. In Sept 2009, the lender finally filed lawsuit to "quiet title". The liens in question on this lawsuit pre-dated that most recent owner.

Another dilemma arises in situations where "equitable subrogation" comes into play. I will not explain this term; you can google for it to understand what it means; and it may or may not apply in your state. Situations like this aren't so common, but I would not be surprised to see more of them happening with the extent of the distress in today's market.

And then there are subordination agreements. These are rare indeed, but they do occur; when you have a subordination agreement, lien positions don't turn out to be in the chronological order in which things were recorded.