Question about title search before foreclosure auction

Foreclosures, Short Sales, Tax Foreclosures
1

Hi,
A question for anyone with experience bidding at foreclosure auction…

I’m in CO. Regarding the title search prior to bidding. What do most of you do?

1/ Hire a title company and pay for a search of liens against the property etc. I can see that this could get expensive if I want to check several properties and might not be successful at bidding.

2/ Spend time at the records office wading through all the records.

3/ Use an online service. Any recommendations?

Thanks in advance for any help!

David

2

I would try to check the county web site to see if you have access to title searches that way. I know the county I am in I am able to do a title search just as long as I have the address or the name of the property owner. Every county is different though. Good luck!

3

You can try realquest.com, but they don’t guarantee that its completing accurate.

Im in the process of learning the" had to do a title search"

                                                          Rach
4

David,
Learn to do them yourself, saves money plus when you do due diligence for your self you will look a little harder. Your dealing with not quite perfect humans. And all web sites have disclaimers. Beside
your run of the mill title search.Their are things that they wont find. Look for the following: Federal Tax Liens, State Tax Liens,States Sales Tax Liens, Mechanics Liens,
Material Mens Liens,EPA Liens,Back Water or Sewer Bills.

                    Hope this helps,


                       THawk ;)
5

Don’t forget to look for child liens…in oregon they attach to the house not to the individual. Therefore you have to go the another part of the courthouse. found out the hard way.

6

How to do a title search

Sorry if this is long. I generaly start with an on-line basic search then move to the court house. These are the areas I look at.

A title search generally includes mapping a chain of title by examining all the recorded deeds concerning the property. A chain of title is established by determining that the present owner received valid title from the prior owner, and the prior owner received valid title from that prior owner on down the line for a certain number of years.

What’s on the title?
You will find:
• the names of the owner(s) of the land;
• description of the land;
• easements;
• mortgages;
• Caveats; and covenants.

What you can find and where:

TAX ASSESSOR’S OFFICE

WHAT YOU CAN FIND:

• LEGAL DESCRIPTION
• PROPERTY DATA
• TAX APPRAISAL

RECORDER OF DEEDS

WHAT YOU CAN FIND:

• HISTORY OF TITLE
RECORDED DEEDS

ELEMENTS OF A VALID DEED

 Name of the grantor
 Name of the grantee
 Recital of consideration
 Legal description of the property
 Words of conveyance
 Signature of the grantor
 Acknowledgment
 Delivery and acceptance

TYPES OF DEEDS

 General Warranty Deed
 Special Warranty Deed
 Quitclaim Deed
 Deed of Trust / Mortgage
 Release Deed
 Trustee’s Sale Deed
 Sheriff’s Deed

DEEDS: BOOK ACCESS

  1. USE PROPERTY’S LEGAL DESCRIPTION
    FOR SUBDIVISON INDEX TO LOCATE LAND
    LIST BOOK / PAGE NUMBER

  2. PULL OUT LAND LIST BOOK, TURN TO
    CORRECT PAGE NUMBER AND NOTE
    TRANSFER OF OWNERSHIP

  3. LOCATE TRANSFER OF TITLE

  4. GO TO MICROFILM AND PULL
    THE CORRECT BOOK, THEN
    SEARCH FOR THE CORRECT
    PAGE.

  5. VERIFY CURRENT AND
    PREVIOUS OWNERS ON
    WARRANTY DEED

DEEDS: COMPUTER ACCESS

  1. SELECT NAME OPTION ON THE FIRST SCREEN

  2. TYPE IN NAME OF CURRENT OWNER

  3. CROSS REFERENCE LEGAL DESCRIPTION FOR DEEDS RECORDED ON SUBJECT PROPERTY

  4. BEGIN SEARCH WITH WARRANTY DEED, THEN CONTINUE SEARCH FOR OUTSTANDING DEEDS OF TRUST

  5. DEED OF TRUST:
    VERIFY PARTIES, NOTE AMOUNT, TERM OF LOAN, INTEREST RATE IF AVAILABLE

TREASURER OR COLLECTOR OF REVENUE’S OFFICE

WHAT YOU CAN FIND:

PROPERTY TAX BILL

 THE PROPERTY TAX BILL

Morgage still owed:

How do we estimate the amount owed on a property?

Say the Mortgage Date was 1/1/94 for $200,000 at 7.75% interest. The monthly payment is $1,510.66 and using the loan amortization it has a balance of $148,223.48 left on the mortgage. Since the loan was in 94 for $200,000 and about 10 years has gone by we have a great equity spread even without even considering property appreciation.

7

The real story!

Investor purchases a HUD Foreclosed property and the Title co. discovered a lien of over $7000 from the HOA Company.

HUD refused to pay the lien.

It was assumed that if HUD can not give good insurable title then they must give you your deposit back.

So many investors assume a title is clear just because It’s a HUD, VA or any other REO’s.

All learn from this, the devil is in the details, if you do not do a title search your self before you place a property under contract you will assume HOA and tax lines unless your contract calls for a clear title clause.

Please read and understand what you are signing and understand what you are buying!

You have two options in this case to purchase the property or loose your earnest money and possible other cost as the lender can sue you for breach of contract.

As the purchaser, it is your responsibility to be clear on your purchase and what you are purchasing.

A title search is the true method to be sure you really have a great deal.

HUD has no obligation to clear all liens and they have no obligation to disclose and defect on title or the property.

This is what the term “as is” means in the business.

HUD Single Family Foreclosure Act

The statutory language providing for notice of default and foreclosure sale says nothing about payment of prior liens. It does state that the notice can provide “any other appropriate terms of sale or information, as the Secretary may determine.” Title is transferred subject to any prior liens, and the sale proceeds are not used to pay them. The statute is unclear as to whether it envisions some other method of application of payment. Perforce, the statute is also unclear as to whether the term “prior liens” would include judgment liens, statutory liens, equitable liens, or mortgage liens (accelerated or unaccelerated).

Research HUD Single Family Foreclosure Act and the Federal Foreclosure Act and you will be on your game a little better as an investor.

Read HUD property disposition contract you will find no promises good and or clear title

AS IS is actually what it means AS IS! In title and structure!