Is there a newbie guide to understanding title search results?

Question

I'm trying to learn all I can about buying foreclosures and "practicing" on some properties as if I were ready to buy. I've ordered some Ownership and Encumbrances (ONE) reports from a local title company and am trying to understand the results. Some are pretty confusing.

Is there some sort of guide to understanding them? A quick Amazon book search turned up nothing.
I'm in Colorado for what it's worth.
Thanks!

Another quick newbie question: I ran a report on my own house and it only showed my current mortgage which was a recent refi, not my original mortgage or, more importantly, the lien from the loan I got to install solar panels (I know it's out there because I had to deal with it when I got my refi). Am I correct that it missed something important and I should be worried about using the reports?

Thanks again!

Douglas Snook · Answer

What is the title company saying exactly? Are you just getting a list to what they found on title? Are you then wondering how it affects title and/or how to fix it?Here in MA I order a title exam and am provided with copies of the deeds in the chain of title, the mortgages etc and a cover sheet with notes by the examiner like "Discharge at Bk 1234 Pg 10 appears to have wrong party", then I look at the copies and have to decide if it is really an issue and if so how it can be fixed going forward in order to close.Maybe you need to order a different type of report. Maybe see if there is a freelance paralegal around who can interpret or explain the report for you. (check craigslist under legal)What type of report did you run on your house? Did you have someone else do it? Again, in MA the registries are on line and everything would come up. Sounds like the report is only giving you current open matters.As for the solar panels, sometimes they are filed as a UCC and not necessarily at the registry of deeds. Perhaps the person who ran the report didn't check the UCC listingsHope this helps

Peter Walther · Answer

Let me put it this way, I did title claims for various underwriters for over 30 years and never once did I go into work wondering if I'd have something to do. There were days when I'd hand out 7 to 10 new claims to every claims examiner in the department. They'd range from matters not covered under the policy, I had one insured who thought title insurance was for damaged tiles in his house, to total failures of title because the guy who signed the deed forged the signature of the actual owner. It went on and on.

Wayne Brooks · Answer

@Jim Stanley The title report on your house Shouldn’t have shown your original mortgage as it was paid off/released/canceled when you refinanced.

Jim Stanley · Answer

Peter,How common is that type of thing?Thanks

Peter Walther · Answer

Here's a title exam horror story for you based on a title claim I worked on. A 1st lender filed a foreclosure suit against a borrower and named the 2nd lender. The 2nd lender filed an Answer admitting it was in a 2nd lien position and filed for foreclosure of its lien in the same suit. The 2nd lender obtained a final judgment before the 1st lender and the property went to sale. An investor bought the property and received a Certificate of Title. The investor then found a buyer and an agent of the underwriter I worked for searched and examined the title and failed to realize the 1st lender's foreclosure was still ongoing and closed the sale and issued a title policy w/o exception for the 1st mtg. The problem came to light when the insured got a knock on the door from the new owner who had purchased the property at the 1st lender's foreclosure sale. The moral of the story is you better know what you're looking at if you're going to examine title for an actual investment.

Jim Stanley · Answer

Teri-Thank you VERY much That was extremely helpful

Teri Feeney Styers · Answer

@Jim Stanley an O&E report (ownership and encumbrances) only shows what has taken place under current ownership (which means it is useless if you are looking at foreclosed homes because it is only going to show what has taken place after the lender regained ownership). Title insurance companies usually charge a very minimal fee for an O&E (like $5). In Colorado one component of the Contract to Purchase are title work deadlines. An agent or seller will order the title work and you have a chance to review it before closing and back out if you find things you don't like. An actual title commitment will show outstanding liens, a legal description including easements, and who has to do what in order to transfer clear title. Schedule A has to do with the costs. Schedule B part 1 are the special requirements for that particular transaction (such as seller has to pay off the existing mortgage). Schedule B part 2 are general exceptions. In Colorado these days title insurance is usually issued as a special warranty deed (meaning only covers the current owner issues). For about $75 you can purchase additional O&E insurance that covers additional exemptions - including the first 4 items in Schedule B part 2 which are the ones you are most concerned about. Privately you can also pull records from the County Clerk office - any liens that have been recorded will show up there.

Jim Stanley · Answer

@Chad U.Thanks that’s the one I found and bought after the original post

Chad U. · Answer

https://www.amazon.ca/Bulletpr... This book gives you a great understanding. Alex Goldavsky has one of the most widely used title report companies in the debt buying business. And Doug is correct above that the solar panel lien is likely filed in the UCC and not against your property.

Jim Stanley · Answer

Frank- I'm looking at houses that may or may not go to auction so it's not cost effective to buy title insurance on all of them. I mostly need to know that I am buying the right lien and there are no other "surprise" liens or lawsuits.Douglas- I think I'm getting about what you are. I just want to be sure I understand it. It's confusing what deeds and mortgages are current as opposed to paid off.Sriv- That NC link looks really good- I'll read it.I did end up finding and buying a book on Amazon. Should be here in about a weekThanks, all!