I will disagree as to foreclosures in nonjudicial foreclosure states. In these states, since the matters do not go through the courts, the Official Records (General Records by Grantor-Grantee Indices) are critical to the foreclosure process.
Firstly, making sure that you are aware of the effective dates of the various county systems and reflecting them accurately in your reports. I even recommend "backdating" your effective range (the current date) as I've seen all too often indexing errors and the effects of computer system changes days after a recording date. If you can do so, take a digital camera and copy your index run page to prove the results located, in case the results are later changed by county staff. Our county (San Mateo) and other around it, do NOT maintain an error log.
Secondly, review documents carefully. Errors mainly come in three forms: (1) Indexing errors by county staff where the document is correct but the index is typed wrong. (2) Document errors where the document is materially flawed: wrong loan number, incorrect date reference, wrong property listed, invalid mortgage reference, etc.... (3) Third party index errors on private databases: see my prior story about an elderly couple notified of default when they don't even have a mortgage whereby the database firm abstracted their APN wrong off a correct record. With regard to these matters, do two things: 1. keep copies of all documents (in addition to the index copies from above). 2. get a subscription to an online database system and run the property to help locate any default or trustee sale matters that are mis-indexed and might show up later on the public rolls or on other disclosures.
Thirdly, keep in mind that title insurance is not available in many states for foreclosed properties for many months after a trustee sale deed records (regardless of whether it goes back to a bank or to a third party bidder). As such, if someone is asking you for an insured product, don't offer it and be cautious about what promises and guarantees that you make in any report.
Fourthly, for pending foreclosures where a sale date has been set, track them on the trustee websites to watch for auction date updates. Things shift and change.
Fifthly, check the courts; look for bankruptcy filings on PACER and check the local Superior Courts (or equivalent jurisdictions) to ensure that no lis pendens actions or bankruptcy filings have occurred which can take legal priority over a foreclosure.
Sixthly, check and recheck the Grantor-Grantee Index to ensure that you understand and report properlly on lien and encumbrance matters. Understand the role of IRS liens, subordination agreements and other matters that can affect whether a lien is active or terminated by a foreclosure action, or whether that foreclosure could be overturned. The feds tend to take their liens very seriously and will collect regardless of a foreclosure.
Lastly, understand the different types of foreclosure and what they mean. Maybe this should be first....anyway, a foreclosure by the County Treasurer for nonpayment of secured property tax is different than a "mortgage" (deed of trust) foreclosure which is different than a true mortgage foreclosure which is different than the (rare) judicial foreclosure which is different than a homeowners association foreclosing for nonpayment of monthly dues.
Ultimately, do your duty by reporting all matters openly, honestly and comprehensively with good and full disclosure.
Know your markets.
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