I admit that I am freaking out a bit about a problem I have run into. I consider myself pretty experienced in REI. I have bought dozens of properties at sheriff sale and researched 1000's and I am in the middle of a situation that I have never seen nor heard of.....and I am currently out $500K cash as a result.
My attorney is working on it and it might get resolved but I wonder if anyone else knows about this.

I am in a judicial state. When I research properties up for auction I use a respected 3rd party information service and I research title via the county recorders office and do a little other digging. I read the Lis Pendens filing but I don't read every filing made during the court process.

It is a long story but here is the bottom line in my current case. A Lis Pendens was filed by lender A on loan 123. This was recorded in all the databases and in the county recorder. There was a also junior mortgage which was named as a defendant as normal. 18 months later the case has made to to auction. The case is published with the same case number and the same plaintiffs and the same subject loan in all the databases and the recorders office. Several people bid at auction and I "won". Lucky me.

Well it turns out that at some point during the 18 month period through some counterclaim process by the junior lender, the loan being foreclosed actually CHANGED to the junior loan. The case number stayed the same, the case proceeded under the same original plaintiff, all the databases and the county recorder office continued to show the subject loan as was Lender A and Loan 123. However, the loan being foreclosed at auction is now lender B and loan 456.

I am still reading through the minutiae of the court filings but this is just stunning to me. I have never heard that the subject loan of a foreclosure could switch midway through a case with no outward change to the case. This seems crazy. My lawyer said it is very rare. An official title search would not even catch this change.

Has anyone else run into this? I wonder why, in all the books, seminars and classes I have taken this was never mentioned. Seems like kind of a big deal.

I research so many properties, I don't know how I will have the ability to read hundreds of pages of court docs on every case before buying.

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