Foreclosure Due Diligence Q & A

[Terry Portier]

In looking at a bank owned REOs, courthouse steps or online auctions like auction.com, HUD, etc, or just wanting to understand basic REI principles, please provide some insight and correct me if I am wrong so far.

1. Register of Deeds (ROD) office, all mortgage activity (1st, 2nd, 3rd), but not mechanic liens, is made legal by public record. Caution here recent activity may not be shown online always a good idea to call. You can get a legal description at the clerk’s office ROD will need

2. Civil court is where foreclosure takes place there is a public auction at the sheriff’s office. It is important to understand redemption rights; value and when the redemption period ends or basically when the person foreclosed on gave up there interest to the property. I’m not sure how you determine value since ROD list mortgages assigned and do not reflect what’s owed? The court can also give the attorney’s name, and identify any mechanic liens. You will need a name which can be obtained at the ROD site on the mortgage, to obtain a case #.

3. Some sellers may issue a “Quick Claims Deed” that does not mean title is free and clear, a “Warrantee Deed” does. I’m not sure what this means, if there is a problem the deed is a contract under warrantee or not? Is there a third party involved here?

4. Title insurance protects the buyer in any law suit if title is not free and clear? So regardless of due diligence if you miss something you are covered?

5. Find out back taxes at the appraisers office.

I learned all that yesterday lol after almost bidding on auction.com. I have read you have to be a seasoned investor that understands due diligence, so I thought if anyone cares to educate us noobs feel free. I backed out because I don’t feel I am educated enough.

Thanks! :)