Best Way to Run an Owner/Title Search
Hello,
I'm looking for some guidance on a defaulted private loan in Pennsylvania.
I'm the first-lien lender on a property in Pittsburgh, PA. The loan has been in default for quite some time, and the borrowers have stopped responding. I had a Notice of Default sent, but I never received a response.
Based on advice from another investor, I'd like to run a current owner/title search to see what liens, mortgages, judgments, or other encumbrances are currently attached to the property before deciding on my next steps.
What is the best way to obtain this information? Can a title company provide it, or is there another service or professional you would recommend? If you've been through a similar situation in Pennsylvania, I'd really appreciate hearing what worked for you.
Thank you!
Ria
Most Popular Reply
@Ria Gupta, I am also in PA. Here are a few thoughts:
1. If you are in 1st lien position, why would you care about other mortgages and judgements? You are you ahead of them in line to be paid.
2. The thing that generally will be ahead of you to be paid is the GOVERNMENT! So, I think IRS tax liens, municipal liens, and estate taxes.
3. For IRS tax liens and municipal liens, I would search the Prothonotary's office in the county the property is in. That is where they should be recorded. Municipal liens in my area are usually for utilities provided by municpal government authorities like garbage and sewer.
4. Estate taxes are a little more nebulous as they are not specifically recorded as a lien to my knowledge. If you find the owner has died, check for an obituary and see who their closest relative was. That should give you a fair idea what tax rate needs to be paid for the estate taxes in PA. The rates are listed on this site:
5. Check property tax payment status! I am guessing that there were no escrowed taxes with your loan. So, you want to make sure that the property isn't headed to tax sale because the owner hasn't been paying taxes.
In PA, after 2 years taxes are delinquent, they can move the property to the 1st state tax sale/auction called the Upset Sale. Luckily, if someone buys the property at that sale, your lien remains in place for the new owner.
However, if the property does not sell at the Upset sale, the following year it generally goes to the Judicial Sale (Free & Clear Sale) where you lien would be wiped away! If that were happening, the tax claim bureau should be contacting you, but its a messy process so that may not always happen as it should. So, definitely check the status of the property taxes.
6. Since you are at the point where the owner is unlikely to pay, I would take all my research and hire a real estate lawyer to move to foreclose on the property. I would not try to handle it myself.
However, I would do this leg work ahead of time so that I could provide that to the lawyer and have a dialog with them with information in hand about the status of the property.