FORECLOSURE TRUSTEE AUCTIONS CURRENT OWNER SEARCH ENOUGH??

Question

I am currently reviewing the process of studying property titles especially as it pertains to trustee foreclosure auctions.  I am hearing lots of people who are self described professionals in the business saying that current owner searches are enough. They claim, there is no need to go back to previous owners and to trace their encumbrances/liens. I guess they go back to the last title cleared by a title company and they trust in that.  So they just go forward and review all recordings from there. Not sure if this is the way to go.

Jay Hinrichs · Answer

if there is a mortgage other than private owner contract..  that lender got in most cases alta lenders policy..  depends on your risk tolaerance.. we never went deep on title.. and it bit us once with a mortgage that was released but wells fargo sued us saying it was done inadvertanly so it was a problem we had to deal with.. lawyer fee's etc.. i think we only lost 20k or so but that is on one deal when 100s went fine.. so to me just cost of doing busienss if you have one bummer.

but if its the majority of your liquidity I could see you wanting to be careful.. and frankly for most they should not risk foreclosures at all.. first off the deals simply are not that great anymore..

Tom Gimer · Answer

Like @Jay Hinrichs said... it depends on who is foreclosing. National lender? They would almost certainly have lenders insurance coverage and before foreclosing would run full title and confirm lien position... and of course they would make and see a title claim resolved if necessary.

Anything else and current owner is not enough. But why would you even mess with this? If you're paying a third party we're talking about a few extra dollars to bump up to a full search. If you're doing this yourself then it's just more time and perhaps a few more judgment reports. An error here can be huge.. no skimping.