Pre-foreclosure title transferred to trust

5 Replies

So there's a preforcelosure set for auction in October (Collin County, TX) that I was monitoring. I was doing research through the Clerk's site and saw the deed was transferred into a trust in July by the owner (named in the foreclosure notice). 

I guess I'm too n00b to know all the rackets, but it made the Ol' Fraud Investigator in me's Spidey Senses tingle. I can't be that easy to cloud title, can it? If it's a living trust then the Grantor is still Beneficiary, so it's a wash. Even if it were a trust they were "unaffiliated" with, the note still supersedes the transfer, right?

What angle are they working?

That should have said Deed transferred to a trust, I told you I was a n00b. 

Sounds to me like there is an "investor" involved who may be attempting to get control of the property in order to bring it current.

Ahhh, that would make sense. Thanks Hattie. 

Trustee's signature was not on the transaction but they still got it notarized. I thought that was strange. 

Since the Deed of Trust (lien to secure mortgage) was filed for record first, then the July Deed transferring title to the trust is subject to and inferior to the Deed of Trust. In other words, the new owner, the Trust, is still encumbered by the Deed of Trust lien. Therefore, if the Deed of Trust is foreclosed and sold at auction, then the July Deed is extinguished.

Or, as Hattie suggested, perhaps an investor is "attempting to get control of the property in order to bring it (the loan) current (and avoid the foreclosure)."

Thank you both for your leaned wisdom. 

My old mentor as a rookie PI used to tell me "It's hard to know if a con is a stupid one or a brilliant one, because they usually both appear the same on the surface."

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