A basic question about reviewing judgments

[Bob Jones]

Hi,

I have a question about judgments. I'm hoping someone can clarify something. 

Sometimes, people have common names. When this is the case, a judgment search may reveal possible judgments against them. The title company now needs to determine whether the judgment attaches to the property. In this situation, there are a few things you can do. 

If the possible judgment is against someone with the same name as the seller, you can contact the judgment holder and verify that the SSN's aren't the same. If the judgment was against a previous owner, you're not going to have their SSN. But, the seller will hopefully have a title insurance policy from when they purchased the property. Your title company will feel comfortable insuring the transaction, safe in the knowledge that the previous title insurance policy can be used to pay off any unreleased prior judgments. 

If the seller didn't get title insurance, your title company can at least contact the prior title company and ask them how they cleared the judgment. They may be able to provide the prior owner's SSN to your title company, thus allowing them to clear the judgment. 

But, what if the seller didn't get title insurance and didn't use a title company when they purchased the property? Let's say the seller was dumb and paid cash for a property without ensuring that there were no title defects. Now, and a judgment search reveals a possible unexpired judgment against a previous owner with a common name. 

This is where my knowledge ends. What do you do in that situation? 

[Tom Gimer]

It’s 12 years in MD unless renewed (and I’m not referring to State tax liens which never expire, but I’m sure you knew that).

No title policy means no LOI and no coverage under any applicable mutual indemnity agreement between insurers... so coverage is out and potential liability is on you.

Easiest clear is connection to the address. If the prior owner never lived at the address where the complaint was served but someone else with a different SSN did, you should be good. You need software to do this correctly. We use Accurint. You should be able to easily identify the true judgment debtor (as well as prior owner) and clear the title issue in a matter of minutes.

If you are not in a position to use appropriate skip tracing software, you are not doing this correctly and should be outsourcing this.