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NewKidInTown3

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Member Since: 09/01/2005
Frederick, MD

Posted: 16:58 on 07-17-2008

Judgments survive foreclosure. As a general rule, judgments follow the person, not his property. Liens attached to property as a result of a judgment do not survive foreclosure if they are junior to the foreclosing lien. Senior liens might survive foreclosure.

If you are bidding at a foreclosure auction resulting from a first position mortgage loan default, you need not worry about any existing judgments the defaulting homeowner may have.

There are subscription sites that will let you search public records without resorting to a title search. Here is one you might find helpful. I believe an annual unlimited search membership is less than $50

http://north-carolina.staterecords.org/?uid=91862&conversion_id=1045698132&gc_source=g&sj=QkFOS1JVUFRDSUVTLCBMSUVOUyAmIEpVREdNRU5UUyBSRUNPUkRT

[ Edited by NewKidInTown3 on Date 07/17/2008 ]

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thelemur

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Posted: 21:44 on 07-17-2008

Thanks I will check that site out. This is a junior lien so the existence of judgments is of great concern to me.

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NewKidInTown3

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Posted: 11:23 on 07-20-2008

I am confused. A junior lien will probably be wiped out by the foreclosure and the property will convey free of this lien.

An existing judgment will follow the person, not his property. Why are you still concerned about any judgment the defaulting homeowner may have?

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thelemur

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Posted: 12:30 on 07-20-2008

Let me clarify; it's an HOA lien on a property with no existing financing secured against it. I've searched our local register of deeds and come up with nothing, but I felt that this was too easy and that there simply must be other areas I need to search. Is this all a title company does for a title search? It just seemed too easy.

We have a system here that tracks judgments and legal actions, so I was searching that to ensure that there is not a risk of a lien being placed on the property in the time frame between the foreclosure sale and the new owner taking title.

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NewKidInTown3

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Posted: 00:01 on 07-21-2008

Is your judgment tracking system a public system available for online access? If so, would you post a link?

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bargain76

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Jacksonville, FL

Posted: 00:10 on 07-21-2008

After researching tens of THOUSANDS of foreclosure for title issues, I can honestly say I have NEVER seen a HOA lien in first position.

Better check further. It's not impossible...but it's very improbable that there are no senior encumbrances.
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thelemur

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Posted: 00:53 on 07-21-2008

The county employee I spoke with told me that it wasn't online. I had to do my search down at the courthouse. I looked up the judgments from the terminal provided, found the book and page #'s, and pulled the big old books off the shelves, then pulled the microfiche off the documents.

If that's all up to date online somewhere i'd be ecstatic.

Quote:

On 2008-07-21 00:01, NewKidInTown3 wrote:
Is your judgment tracking system a public system available for online access? If so, would you post a link?

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thelemur

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Posted: 01:09 on 07-21-2008

I will check again, but I don't understand why it would be so rare to see that type of lien. I'm curious to hear more.

The current bid must be many years of back dues and is up to quite a few thousand dollars. The homeowner has also been down this road in the past and paid it off.

With the register of deeds I looked up every document that showed the current homeowner as the grantor. This should show any mortgages on the property. I made sure that none pertained to the subject property.

I am hoping that I did as good of a job as a title company would. I am pretty familiar with deed of trust/mortgage and title terminology but I'm worried there may be something I'm overlooking.

Quote:

On 2008-07-21 00:10, bargain76 wrote:
After researching tens of THOUSANDS of foreclosure for title issues, I can honestly say I have NEVER seen a HOA lien in first position.

Better check further. It's not impossible...but it's very improbable that there are no senior encumbrances.

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thelemur

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Posted: 12:00 on 07-21-2008

Also,

I just spoke with a real estate attorney who advised me that any judgment attached to a person is automatically associated with the property, and that they will not issue title insurance if there are any judgments outstanding in the homeowners name.

I said that I was under the impression that the judgments follow the homeowner and not the property and she said that this is absolutely not the case.

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cjmazur

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Posted: 12:48 on 07-21-2008

This is not the case in CA.

You must record an abstract of judgment in all counties and states in which the debtor owns property to get the broadest coverage.

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thelemur

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Posted: 13:49 on 07-21-2008

Interesting, I guess my state is different.

I'm wondering what happens if a homeowner has a judgment, but multiple properties. I'm curious if any property of his is going to have the judgment attached.

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ITBInvestor

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Posted: 22:35 on 07-22-2008

Like bargain says, it is unusual to see an HOA in first position. I've seen this one time... about 2-3 years ago. The sale escalated quickly to about 65% of the assessed value, well in excess of the $3K or so owed to the HOA. Upset bids pushed the property up to about 80% or so of AV. I was not involved in the bidding or buying, but concluded that the "seller" went down this path to avoid a traditional "listing." A smart owner, IMO. No hit on credit (no mortgage!) and with our state's 10 day recision period,an "unacceptable" bid could be eliminated by the "seller" paying off the outstanding HOA amount (plus court and attorney costs.)

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thelemur

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Posted: 00:01 on 07-23-2008

Well i've been doing more research, and I also had a title search done. There's a very old lien for about 50% of the property value, but I have a suspicion that it may have been satisfied. Not one person bid on this property at the auction. I hope I get it

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NewKidInTown3

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Posted: 11:01 on 07-23-2008

Quote:

On 2008-07-21 12:00, thelemur wrote:
Also,

I just spoke with a real estate attorney who advised me that any judgment attached to a person is automatically associated with the property, and that they will not issue title insurance if there are any judgments outstanding in the homeowners name.

I said that I was under the impression that the judgments follow the homeowner and not the property and she said that this is absolutely not the case.

Let's go back to your original question and reset the stage. Since your topic was titled, "Searching For Judgments Prior To Bidding", I automatically assumed that the property you are bidding on is an auction foreclosure property or an REO.

Hence, my response was couched in the context of a foreclosure property. I said,

Quote:

Judgments survive foreclosure. As a general rule, judgments follow the person, not his property. Liens attached to property as a result of a judgment do not survive foreclosure if they are junior to the foreclosing lien.

Your attorney is absolutely correct. In nearly every state in the country, judgments do automatically establish a lien on any and all real property in the county in which the judgment is recorded. If the judgment debtor wants to refinance his property or sell his property, the mortgage lender will require all outstanding judgments to be satisfied as a condition of obtaining new financing.

But that was not your question. Your question was whether you should be worried about any judgments if you are planning to "bid" on a (foreclosure) property.

I stand by my original response. A judgment does not go away just because of a foreclosure. Foreclosure will either satisfy a lien on a property or it will extinguish junior liens established by a judgment. If the lien was extinguished, the judgment is still in full force and effect and can still follow the judgment debtor until the judgment expires or the judgment is satisfied.

If that person moves to another state, the judgment can be "domesticated" in the new state and automatically attach a lien against any real property that person may own in the county where the judgment is recorded.

Any property you acquire at a foreclosure auction will not be encumbered by any judgment lien that may have existed, so the answer is still NO. You do not have to worry about any judgments or do an independent title search to find any judgments for a property you are planning to bid on at a foreclosure auction.

[ Edited by NewKidInTown3 on Date 07/23/2008 ]

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