The idea there is to level the playing field and afford protections to borrowers who may not be wise to ways that less than honest lenders may take advantage of the borrower.After a loan is purchased, RESPA requires a notice to the borrower for any transfer of servicing and a certain amount of time for the grace period to the borrower to adhere to the change.  

You can transfer them to an LLC after getting the loan, but that violates the due on sale clause. 

And always do transfers through an escrow agent in the US (or Canada or Europe for that matter, depending on where you are based): never ever release any money, unless all documents, title, property clearing is in place.

Prelim title report contains a quitclaim deed transferring ownership from the descendant to a revocable living trust under his name, with the descendant listing himself as the trustee.

Primarily - Lost bid although my "winning bid" transferred at 10 second clock. 

If the property  is finance, you need to worry about the due on sale clause when you transfer into a LLC, and an LLC will not protect your asset.

Are there issues where a lien can be filed or are there encumbrances that transferred based from the previous owner to the new owner (me)?

Don't share confidential details. 

Find out how much is being held for deposits, they need to be transferred to you. 

In simple terms, your gains get transferred to the new property and continue to grow tax free until you sell the new property.