The other day my partner and I had come across a home on an online auction site. It had a quit claim deed attached to it so we had a title search done. The people at the title company told us that a woman took out a mortgage on this home recently. This I can't imagine being a best case scenario, but I am wondering two things. The first is that I came across a few websites and YouTube videos that suggested in a quit claim deed a mortgage doesn't transfer from seller to buyer - is this true or false? And secondly, if you were in my shoes would you walk away or continue to proceed with the purchase - if continuing with the purchase, what should the next steps be? This would be my first home purchase so I'm still new and learning. Thank you!
Mortgages -- if properly perfected -- attach to property. Until paid or released they continue on regardless of who is the owner of that property.
Well, with a Warranty deed the mortgage doesn’t “transfer to the buyer” either. It is attached to the property no matter how many deed transfers occur, which yes, does affect the buyer.
In your case if an REO auction, it makes no difference whatsoever. You generally are buying with clear title and title insurance, as per the auction terms.
If you are looking st the actual foreclosure auction, the qcd still makes no difference but there is a lot more to look out for.
Thank you for your responses guys, this has been extremely helpful!