It sounds like Steve misunderstands what gets record and what does not.Mortgages and Deeds of Trust (Security Instruments) are what is recorded.  

At minimum, you should have leases that detail security deposits and rents so that there are no misunderstands. 

@John S Lewis maybe I'm misreading or misunderstanding your post, but it sounds like to me the posting is saying "don't worry about obtaining a CO the seller will take care of it and don't bother the tenant in your due diligence".

No doubt that education is needed, but I think there was some misunderstanding after some of you read my very first post.

You really misunderstand the debt side.

Hopefully the service members commanding officer can explain it as a misunderstanding in the am, but it doesn’t currently look likely that that will be the case.

From there, you can decide if the issue is just a misunderstanding or if there is serious abuse going on.

If I am misunderstanding let me know and we will go from there.

Ryan,Maybe I'm misunderstanding your post, or maybe your misunderstanding mine.I was responding to the idea that There likely was something else that stopped people from bidding the loan amount at auction.Of course it would not benefit the lender to "artificially" inflate the price.I was speaking to the fact that the lender would not likely stop at the loan balance amount when there is overwhelming evidence that the property is worth much more, such as this case.And yes, in every state that I'm aware of, the previous mortgagor would be entitled to the surplus proceeds from the foreclosure auction.Your post, So is the lender going to take that kind of risk because of a couple BPO's or appraisals?

You may have considered some and discarded them due to misunderstanding their significance.