In this instance, If Timmy Tax Buyer during the course of his tax deed case, named and served Magnum Mortgage, that had a mortgage interest against the property in question, the interest of Magnum would be extinguished by the tax deed provided there were defects in notice to or service upon Magnum. 

On the face of it, no objection was raised to the foreclosure procedure and there is no suggestion whatsoever that foreclosure procedure itself was defective.

On the face of it, no objection was raised to the foreclosure procedure and there is no suggestion whatsoever that foreclosure procedure itself was defective.

I have many times gone to see a property  where the pics look great on the listing, but there were major defect(s) once I got to the property.Ah yes! 

I finnaly got a new one to discover that it was probably defective and they bought it very cheap, the seal around the door had been torn off and glued back on crooked.

So, anyone that thinks that properties listed on MLS are defective, or overpriced just needs to be educated on the opportunities that exist in MLS that not everyone else may see. 

However, any mistakes make defects in title.

Apparently there was a defect in the loan agreements.  

As long as the seller disclosed any structural issues that could render the property unsafe, or uninhabitable, and did not try to cover up any such defects so as to make them undiscoverable via a reasonable search/inspection, I doubt you will have much recourse.The defects that you listed in the second inspection should have been fairly evident to any certified inspector.The one area you may have a leg to stand on is the sump and water membrane.

There is likely a point to make about the portion or LTV of seller financing as well.Fundamentally, there is a defect, if you will, to the asset or transaction.