Asked 11 months ago - Saint Petersburg, FL
FlagI am buying the property on foreclosure auction and was told that after I pay in full I will receive certificate of title. I checked public records and found one mortgage that was recorded twice as original mortgage and then it was named as second. The date of both records is identical. There is no any evidence of existing first mortgage. Should I feel safe with such record?
There are three primary ways that an investor can buy distressed real estate: 1) pre-foreclosure (usually short sales), 2) at the clerk of court's foreclosure sale, 3) post-foreclosure "REO" from the bank. The foreclosure sale purchase is by far the riskiest of the 3 methods because there is no guarantee of title or title insurance and usually no opportunity to inspect. You should obtain a title search (and copies of all documents referenced therein) from a real estate attorney and then have that attorney explain the results to you before you bid. Proceed with caution!
Sincerely, Mike Hagen, Hagen Law Firm, Fort Myers
The certificate of title you receive from the Clerk after a foreclosure sale does not necessarily receive anything - all it conveys to the buyer is whatever interest the foreclosing plaintiff had. In some cases, it had no interest at all, in some cases it was an inferior lienholder about to be wiped out by the foreclosure of a superior lien.
The only way to feel "safe" is to retain the services of a knowledgable real estate attorney to search and examine the title of the foreclosing lienholder (which includes an examination of the foreclosure itself) and of the property. If all is in order and if the foreclosing plaintff had the first lien and properly included and extinguished all the other interests, and if the attorney can arrange for you to get a policy of title insurance with no exceptions, then and only then can you feel "safe". People are getting hurt every day, and losing lots of money, buying at these sales because they are in way over their heads. This is very risky. Atty. Hagen is not far from your area - perhaps he can help you or if not, can refer you to someone who can.
When you receive a certificate of title from a foreclosure sale, you take the property subject to any mortgages held by "senior" lien holders that may be recorded in the public records. The existence of two mortgages, although identical, is something an experienced attorney should review for you, and determine whether you will be taking the property subject to any other encumbrances.
As an aside, under Florida law, where a certificate of title exists, it is not conclusive proof of ownership, but establishes presumptive ownership, which may be overcome by competent evidence.
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