What that means is the seller will pay all liens of record at settlement to give you free and clear title at settlement, and depending on the type of warranty deed (special vs. general), that the seller will defend your title against certain (or all) claims after settlement. 

@George Azita The sale would not have been canceled unless the Trustee accepted payment in full, agreed that the sale would not move forward (verified settlement imminent with payoff in full forthcoming), or was prevented by operation of law (BK filed, etc.) 

The time to address this issue properly was to force your seller to do so before settlement... but since you closed, you now own the issue. 

Check your settlement statement for a water / lien escrow.

Sometimes the national lenders advertise better interest rates or no closing fees, but when you look at a sample settlements statement they are charging points or other fees to make it up.

If they have served their time, their debt to society has been paid and you have no right to hold it against them - is the argument that is winning large settlements. 

Here is what I do when I am working on an off-market deal when a Seller's Agent is involved:I lay out my Terms...if Seller is agreeable, then the Seller's Agent can type everything up in the Offer to Purchase Contract (since they are getting paid and I'm not).Here is an example of my Terms:Terms:Purchase Price: [$-amount]Closing: [Date]Rent: FREE from time of Settlement through [30-90 day window].Attorney’s Closing Costs: Buyer will pay up to $1,000 in Seller’s Attorney’s Fees (not to include prorated property taxes)Removal of Debris & Trash: Seller can leave whatever they do not wish to keep, and Buyer will discard or donate FREE of chargeI hope this helps!

I believe that the industry average is below 20 days).The question is what will he be doing with the money from the settlement?

If they get a lawyer, he or she is likely going to suggest they reach a settlement with you and move out, instead of getting an eviction on their record. 

My understanding was that he's putting them in escrow to then draw from as he does the repairs (in his example, it's $10k wrapped into "settlement charges" on the HUD), though I guess he doesn't say this specifically.