Foreclosure Auction- Senior lien holder out of business

[Matt Pfefferlen]

Hello- I am interested in buying a 2nd position lien foreclosure at auction.   There is a really small first lien.  The first lien holder was shut down 6 years ago, but the assets were taken over by another bank.   At county records this deed of trust has not been substituted with the new bank.   Is there anything i should know?  Let's say i was going to turn around and sell it; how does the title company (or whoever responsible) or how hard do they try to find the rightful lien holder to pay?

[Ned Carey]

As already stated even if the original mortgage holder is out of business it will still be a cloud on the title. Also as already stated the owner of that lien may be able to be tracked down. They may accept a short payoff. The fact that the transfer of the mortgage has not been recorded is not really a factor

Title companies run into this kind of issue all the time and know how to deal with it. As @Tyler Sterns says,  @Roman M.they may be easier to find than you think, not for you but for an experienced title/escrow company. It generally will not go away with time unless we are talking decades and legal fees.Yes clearing up a title with a tax foreclosure is a way to do that but not the fastest or most reliable method. 

In the days of live tax auctions sometimes people would speak up and say they want to buy a specific lien to clear up the title, and others would not bid against them.