Hello bp. Im am looking for help on how to make sure a title is free and clear when buying foreclosures in Wyoming. Any info in the foreclosure market would be helpful. Thank you all.
@Colin Stalley , the only way to be safe is to get a title commitment before you buy. Unless you are very good at researching yourself you might miss a contractor's lien or an IRS lien etc. on the property. I have bought some houses just before foreclosure and I have bid n foreclosure houses but only after the title search and name search is done.
I research recorded docs online through the county website best I can, then purchase a L&E (lien and encumbrance) or O&E (owner's and encumbrance) report from my title co if I want to be even more sure. The cost here is $80-$150.
They e-mail the report to me pretty fast if they aren't backed up. This $80 report saved me from buying a house that was collateral for a blanket line of credit that was ID'd only by the parcel number in the loan docs. Didn't buy. Best $80 I've ever spent @Colin Stalley
Just to piggy-back on what @Jerry W. said. You should order the title commitment to ensure it's free and clear but you need to check again right before the foreclosure sale!
One of the podcasts had an example where everything looked good on the title commitment. The individual bought the house at foreclosure and discovered a lien had been filed sometime after they received the title commitment and they had to give the house away because they couldn't afford to pay off the lien.
I would check it when you first identify the deal and again right before purchase.
Does title insurance coverage unexpected lien?
Title insurance covers to the date and time of issuing the policy. Not new liens after it is done.
Now keep in mind that most, not all, liens are extinguished by a foreclosure. A workman's, or contractor's lien is not extinguished as they can be filed for up to 90 days i think after the work is done. Your generic you owe a $20K hospital bill that has been reduced to judgement lien is superseded by a foreclosure as long as the mortgage the foreclosure is based upon was filed first, which it would be.
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