The reason we do title searches prior to a foreclosure is so that all parties who have an equitable or legal interest in the property can be named as defendants in the law suit. Otherwise the bank or plaintiff would not be assured of obtaining clear title to the property. Most Commissioners Deeds convey the property "free and clear of all liens or interests of the parties named herein". A few will convey the property subject to the interest of one or more of the named parties, witch indicates that that party went to court to defend his interest in the property and was successful. Each defendant is served with a complaint and given an opportunity to go to court and defend their interest in the property and collect some or all of the money owed to them.
The Cyclist had a superrior lien over the bank and the finance company and had he executed on the judgment lien prior to the bank and finance company he would have gotten his $50,000., the finance company would have gotten their $20,000. and the bank would have gotten the remainder because they did not record their mortgage in a timely manner. If the bank had a title search run prior to giving the driver a $30,000. mortgage on the property and the cyclists judgment lien was not reported than the bank can go back on the title company to recover their money.
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