I think we're missing the point of having an LLC.If created correctly, and used in the proper circumstances, the LLC will AVOID the lawsuit altogether.If the ultimate judgement cannot be collected due to low or no assets, the lawyer will not file the suit.That's the objective.With an insurance policy, not only is there no deterrent to filing the suit, there is actually an incentive.An insurance policy says, "Hey, here's a million dollars you can take a shot at.  

The transaction is no different as a LLC can have existing judgements and liens as well

This is 2 dollars per search.The second search is a more in-depth back ground search that includes mortgage info, liens and judgement history, financial info, address history, etc This is 10 dollars per report. 

Who do you expect to collect all of these judgements and lawyers fees from?

Just use your best judgement as an investor.

@Alex Tahnat as long as your documents were recorded prior to the sale, then I recommend going to the title company and filing a claim, like Chad said, and let them assume the headache of going after the borrower for repayment rather than you trying to do it yourself, and then your IRA just ending up with a judgement.

It provides credit score, credit history, criminal and judgement checks -- Just remember to verify income.2.

I call these kind of tenants judgement proof!!!

I am more than willing to get a judgement and lien so for the next 7-10 years these kids cannot get any sort of credit.  

Of the 14 loans, I see that at least one resulted in foreclosure, two appear in limbo (not cancelled and property not sold after multiple years, with one court (judgement) action), three don't have CAN or any other recognized mortgage releases even though the flipper sold the property and the transaction appeared to otherwise be successful, and the rest looked like 'good' transactions with the flipper selling and (per tax stamps) made a profit.