reading title reports on auction.com

[Lynnette E.]

I was looking at the title report that auction.com provides with most listings.  This one is by Data Tree/First American.  I copied the section below from the title report and removed the parts that do not add to the question.  

The question is where the report states combined loan to value 89% and estimated equity $10,128, is that based on when the mortgage was taken out or is that updated based on the amount of the loan that remains unpaid + associated fees?

Also it is a live auction at the courthouse steps.  Do these auctions have a starting bid lower than what the bank will take it for?  It seems logical that the bid should start at what the bank will pay, but often auctions are not logic based.  Maybe they start with a lower advertised bid to generate interest?  I am guessing this is the answer, but do not really know.

Does anyone know of any reading material that will explain how to read and understand a title report?

Value Range: $65,790 - $125,325

Sale Date: 02/16/2016
Rec Date: 02/24/2016
Sale Price: $87,006
Status: Default

Doc Type: Notice Of Sale
Unpaid:  (THIS WAS BLANK)

Open Liens - Current Owner

Owner 1:                                                                  Combined Loan To Value: 89%
Owner 2:                                                                  Estimated Equity: $10,128

[Kim Heretick]

Hi Lynnette,

For the past year and a half, I have been going to my local auctions and reading up on title reports related to foreclosures.

1. It depends on what State and County your Sheriff sale is in to say how it works.  

In my County, all foreclosure auctions start bidding at 2/3rds the tax audited value.  The banks come to the auction, or submit their bids, to the sheriff usually in the amount of what is owed to them.  However, there really is no way to find out exactly how much that is unless the current owner tells you.  You'll know you've hit it when the bank stops bidding at the auction.  

Call your local Sheriff to ask how they set the Initial Bid Price.  They'll be able to tell you.

2. You can, and should, do a little research to guestimate what the loan/equity might be.  

Google "(Your County) Real Estate Auditor".   Most counties have an system to search for properties to see who currently owns it, taxes due, past sales transfers, building permits, etc..  

Look up your property and get the current Owner's name (or previous owner's name if it's now in the Bank's name).

3. Google "(Your County) Clerk of Courts dockets".  That should bring you to the website where you can search Case Dockets by the foreclosed owner's name.  

Search the owner's name to find their Foreclosure case.  Within the Foreclosure case online documents, open the "Preliminary Judicial Report".  This will show you a title report, and other details, usually much better than the Auction.com Title Report.  I find reading the "Final Judicial Report" document can also be helpful.  Judicial Reports give great information on their bank loan and any other recognized liens on the property.

4. Any debts/liens listed in the Foreclosure case's Judicial Reports are wiped clean from the title by Sheriff Sale (no matter if you or bank buys it) with one exception.  If they have an IRS Lien, the IRS has the right to buy back the property from the auction winner at the price the auction winner paid for it for 90-120 days.  However, unless the property went for $100k and is worth $1m, the IRS doesn't actually take advantage of this.  You just won't have a "clean" title from it until the period is over.  

If you find another Lien case for the foreclosed owner that is newer than the Preliminary Judicial Report's title search, that may be a lien that you inherit if you buy the property.  Only the liens listed in the Foreclosure case are wiped clean.

If you read the Foreclosure case's "Preliminary Judicial Report" you'll be much more educated about the home loan and can better guess what is owed to the primary lien holder.  Hope this helps!