Am I incorrect in my judgement.

My next question is since all tax sales are final and you assume all judgements and liens,  is there some way to check if a property has a clean title without paying for a full on title search. 

The day before the closing date (May 30th) I was told that the buyer's financing could not be approved for the FHA loan due to a judgement on his credit.

It's a value judgement. 

I do have a couple collections from over 3 years ago but no judgement, liens or bankruptcies. 

Leadpropeller has a free trial & gives all info about properties down to fire dues lien.Landmark is where you search for documents, deeds, mortgages, judgements, etc. 

Use your best judgement to determine which ones you have to slow play and which ones you have to hammer until you get the contract signed.

If the property has more equity than debt he has little risk of a deficiency judgement.

If you go to small claims court and get a judgement in your favor you will likely never collect it.

If a property owner has a judgement against him (not a property lien), does he have to pay the lienholder before closing?