How to read title for

5 Replies

Hi, I'm looking to bid on an auction on, but I am a bit confused about the title.

Looking at the title provided on the listing, performed by TITLE365, in the "Judgment and Lien Information" section, there are a bunch of bullets described as "judgment of record" including: from 2010, a management company amount of a few thousand dollars; from 2010 an apartment management company with an amount of a few thousand dollars;  2011 bank, amount of a couple thousand; and a few other multiple thousand dollars records over the years, including a doctor's office and state revenue collection dept.

On top of this, in the comments it states that multiple bankruptcies were found against names that are at least "similar" to those in the title search, but they didn't have the necessary information to confirm if the bankruptcies actually affect the parties in the report.

On the listing, like with other listings, the FAQ on the bottom of the page says the property will "not necessarily" be "free and clear of all liens".

However, the listing also says that a Special Warranty Deed is available if I get title insurance. I was planning to do so. If I get title insurance, opting for the warranty deed, will this clear all the liens and encumbrances off the title? If the title insurance says there are exceptions to what is covered, which would make me responsible for the stack of judgments against the former owner, then can I back out and not lose my deposit?

I feel very upside down about all this info and don't want to be caught off-guard. 

It depends. A property tax lien is attached to the property, hence is not extinguished during foreclosure proceedings.

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@Alex G. good info. Are there other types of liens that don't get extinguished from a foreclosure?

I asked, and they were firm that hefty title problems is not a reason they would drop the $2500 registration hold.

Maybe I'll create a separate thread to ask, but is there a way to predict what the title company will list as exceptions when you opt for title insurance?

@Chabane Maidi Hi Chabane, I am in the exact situation as you were 1 year ago. I was curious how it worked out? We're just planning to work amicably with the very reputable title insurance of the closing company. Listing agent, seller's lawyer, and the title company have told us it's all clear. But we will be doing a little more due diligence to give them the list from the liens exceptions list,

"Most liens are removed after a foreclosure property sale, but certain liens may remain.Here are some examples:

  • Any lien recorded on title prior in time to the foreclosing mortgage.
  • First Mortgage (if the foreclosing mortgage is a second or third mortgage)
  • HOA or COA assessment liens (in certain states)
  • Mechanic’s Liens (in some states)
  • Government liens such as state and federal tax liens, city or county liens, US Government liens.
  • IRS liens (IRS may buy the property within 120 days after sale at the price paid at foreclosure sale)
  • Code Enforcement Liens, Environmental Liens, and Utility Liens
  • Child Support Liens"

to make sure that any title insurance policy will have coverage for these, was this how it worked for you a year ago? same for us, studio condo bank-owned special warranty deed.

@Alex G. Hello Alex, when you said "A property tax lien is attached to the property, hence is not extinguished during foreclosure proceedings." it sounds like it's the same for every single foreclosure proceeding, so be default there is always a property tax lien attached to the property that is not cleared at foreclosure when the bank buys it back (our property is bank-owned). so when a title is clear, does the bank, after taking back possession of the property at foreclosure, then just pay the tax lien during the period in which the bank owns it before they sell it to you?