CA forclosures - Posted by kent

Posted by Ronald * Starr on August 03, 2001 at 21:06:58:

Kent------

Thanks for your response. Good for you checking it carefully.

Every foreclosure buyer has seen many properties like this. But we always have to go to the sale, just in case this is the time the owner does not pull it out of the sale.

I think you are wise to wait. There there is a tremendous fall out of people who start doing foreclosures and then, after a few months of wasted effort, drop out. Find something easier and that you like.

Good InvestingRon Starr**

CA forclosures - Posted by kent

Posted by kent on August 03, 2001 at 13:05:52:

I was told this morning by a title co. that if this property went to Action and sold for the balance owing on the 1st trust deed and penalties that this would erase all liens and loans including the 2nd except for taxes due.
Does anyone know if this is true?
thanks
kent

Re: CA forclosures - Posted by Ronald * Starr

Posted by Ronald * Starr on August 03, 2001 at 17:18:17:

Kent----

Please the post I made to Frank’s response to your question.

Good InvestingRon Starr********

Re: CA forclosures - Posted by Ronald * Starr

Posted by Ronald * Starr on August 03, 2001 at 17:09:11:

Kent-----

Please see my post to Rob’s response to your question.

Good InvestingRon Starr****

Re: CA forclosures - Posted by frank

Posted by frank on August 03, 2001 at 16:32:45:

Better re check your CA law. I believe that IRS,local
property tax and judgements survive foreclosure sale.
Maybe a local title company T.O. can clear this up fast.
Regards
frank

Re: CA forclosures - Posted by Rob

Posted by Rob on August 03, 2001 at 13:54:39:

Yes, the senior position would wipe-out all junior lien holders against the property, even I.R.S.,State taxes, judgement, loans, Mechanics liens, except property taxes.

Everything is based on the chain of title and what position that you are in. That is why the recording of the lien is very important.

That is why this is a tough game for beginners to venture in. Trustee Sale. Ask Ron Starr.

Rob
415 716-8261

Re: CA forclosures - Posted by Ronald * Starr

Posted by Ronald * Starr on August 03, 2001 at 17:17:17:

Frank----

Rob did except property taxes from the items which are wiped off a property by a foreclosure sale (trustee’s sale). Judgments should be wiped out, unless they are senior to the foreclosing loan. Oh, except for one exception, rarely seen.

If there is recorded in the county a non-IRS Federal judgment, even junior to the foreclosing deed of trust, the judgment holder has a one-year right of redemption on the property. In practice, there are not a lot of these judgments, but occasionally you will run across one. They sometimes come out of admiralty court.

A rare event, but another thing the foreclosure investor should know to keep from getting messed up on an apparently good purchase.

Good Investing******Ron Starr***************

Re: CA forclosures - Posted by Ronald * Starr

Posted by Ronald * Starr on August 03, 2001 at 17:08:13:

Rob-----------

You are giving a short, sweet answer to Rob.

I think, though, in the interest of accuracy, I should mention a couple of exceptions to what you said.

One: IRS liens. True, a junior IRS lien will probably be wiped off the property. But this is so only if: The IRS was notified of the sale, probably by the trustees sale company. Then, after the sale, the IRS has 60 days to redeem the property from the party that bought it at the trustees sale auction. The successful bidder gets back what s/he paid plus the princely sum of 6% per annum from the IRS. I had a property redeemed once. Met the IRS worker at Denny’s Diner and got my check and, if I recall correctly, signed some papers.

Also, IRS liens take their priority from the date on which they arise, not upon the date they are recorded in a county recorders office. So, even if the lien is filed after the date of recordation of the deed of trust, there is the possibility that the IRS lien will be senior to the deed of trust and thus not wiped off by the sale.

Also, in CA, there is the possibility of mechanics lien resulting in a judgement which might be senior to the foreclosing deed of trust and thus not wiped off the property. If the work was started before the deed of trust was recorded or the materials (I believe) were delivered to the property before the deed of trust was recorded, then a judgment resulting from the foreclosure of the mechanics lien would result in the judgement being senior to the foreclosing deed of trust. Thus, it would not be wiped out by the foreclosure on the deed of trust. When buying foreclosures in CA, always do a title search and look for the mechanics lien. Rarely will there be a problem with this, since the lenders do not like to have it happen. But, what if the lender is an unsophisticated private party?

Now, mechanics liens expire if there is no court case filed to foreclose on them. I believe the time is 60 days after being recorded, but it could be something different, such as 45 days or 90 days. If there is no court case filed, the foreclosure investor should be ok. However, there may be some difficulty with the title companies getting good title on a resale of the property.

So, you can see that there are some risks to investing in foreclosure sales that few people know about. I do not recommend that beginners start with foreclosures. Yes, there can be very good money with foreclosures, but you could lose much or all of your investment on some deal. Wait a few years until you are more grounded in real estate investing and then, if you want to try forelosures, study up on them intensively.

Good Investing and Good PostingRon Starr

Re: CA forclosures - Posted by kent

Posted by kent on August 03, 2001 at 19:05:02:

Ron, Frank, Rob,
Thank you all for your help. I have checked a little further into this particular foreclosure. This is the 7th time since 1984 this property and owner have gone to a Trustee sale. He always seems to come up with the money. When I spoke with the title company they said there were quite a few liens and judgements on the property and a 2nd. They were all junior to the 1st. They also said the taxes have been paid. My thoughts are this will never get to the sale. I checked out the house and it is very well kept. Ron I think I will take your advice and wait untill I understand forclosures better befor I jump. Thanks for the good advice, I have learned a lot in the last few days.
kent