Current property deed has two names (X and Y), however the mortgage note has only one name (X).And as per the title search report, Chain of Title1:When the property was purchased the deed has both X and Y names as joint tenants with the Right of Survivorship.Chain of Title2:Later a quit calm deed was made with Grantor( prior owner)  Y and Grantee (deed owner ) XChain of Title3:Again a bargain and sale deed was made the other way from above Grantor( prior owner) X and Grantee (deed owner ) YCurrent Title (vesting information):And one more time a Deed was made with both names (X and Y) on the deed as joint tenants with the Right of Survivorship.Now, as X is the only mortgage holder from the time of purchase, and bank is foreclosing the mortgage on X, will Y have any legal ownership to the property, if the property gets sold at sheriff sale.

If you are looking at a duplex, you would have to live in half in order to pay less than 20% down (maybe 15% some people say, but Ive never seen a bank loan 85% LTV on a non-owner occupied).To answer your question - I would have 4 months of straight mortgage payments PLUS your insurance deductible. 

if i do a title search to buy the house...  

In NVsell on lease w option, no title exchange, landlord tenant relationshipsell on seller financing1. free and clear house, note plus mortgage or note plus DOT, title transfers, if default need to foreclose2. existing first mortgage, sell on a wrap or installment sales contract, due on sale issue, title transfers, if default need to forecloseHope that helps

Investment 60,000Monthly rent 1050.HOA: 300Monthly Tax: 100Monthly Insurance: 20P&I:245Maintenance(10): 105Still 280 Left

Include X percent for repairs, when there's not renters, tax, insurance, etc.  

Auction.com lists a few important docs: Trustee Sale Terms and ConditionsSample Trustee Deed Upon SaleSample Certificate of Sale/ReceiptIRS Form 8300Foreclosure Property InformationTitle Insurance Policy InformationI think the 1st four docs are those I need to fill up, sign up when auction is done.  

Asking price..850,000GR.....75,600...No vacancy added 10% for vacancy....75600-7560=68,040Expenses...26,879.15...not showing management....Insurance......Gas 
Took 50% of adjusted gross income 
Which equaled..34,020 The cap rate with the price of 850,000 and NOI of 48,721 = 5.7%.

You could beat that rate with an online FDIC insured high yield savings account.My two cents... take the deal, don't renew the tenants after the lease is up, and sell the house.

Should just pay for title searches?