Family thought they were buying a foreclosed property. Bought worthless 2nd mortgage instead

[Liberal_in_LA]

Winning bid on mortgage buys family heartache
Carolyn Said, Chronicle Staff Writer

San Francisco Chronicle August 2, 2010

Roberta and Randall Strand took $97,606 out of their paid-off house to buy a foreclosed home at a courthouse auction. Five months later, they found out they actually bought the second mortgage, and that the bank planned to foreclose on the first mortgage, leaving them out in the cold.

The family received and recorded a "trustee's deed upon sale" in November 2009, shortly after the auction, without realizing that they had bought a second mortgage. They showed a locksmith this deed to have the house's locks changed, which they said the auctioneer had suggested. The Strands' daughter, Hayley Strand, and her fiance, Bryan Janbay, moved into the house, about a mile from her parents in the Santa Cruz County town of Boulder Creek.

They spent more than six weeks and $13,000 fixing up the house, which they described as in terrible shape with broken windows and no plumbing, light fixtures or appliances.


Read more: http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2010/08/02/MNRU1EL529.DTL#ixzz0vU2HLGpW

[kelly1mm]

1. I guess they never heard of a title search. nt

[Lorien]

2. The Banksters are slick and getting slicker

que the "it's their own damn fault" Authoritarian brigade.

[geek tragedy]

3. Fools and their money are soon parted . . .

Never pay for a piece of property without doing a full title search and getting title insurance.

[SoCalDem]

4. These courthouse steps auctions can be deadly mistakes for that very reason

Ordinary people looking for bargains probably cannot afford to "title-search" all the properties, since they are not even remotely assured of getting anything...and they have to provide the money or financing on the spot.

I know that people hate to pay the fees associated with realtors, but if you want to buy a house safely, they are the people to help you.

[geek tragedy]

5. If you can't afford title searches and insurance, you can't afford real estate. nt

[SoCalDem]

6. Exactly, BUT

With so many supposed "bargains", and every other tv show telling people how they need to get in on the cheap real estate, it;s not hard to see how this stuff happens. It's just phase 2 of the real estate bubble:(

[uncommon]

7. You can generally search a county registry of deeds free of charge and an experienced

title examiner will only charge a couple hundred to do it for you.

I have to agree with the comment that a fool and their money are soon parted.

[Dreamer Tatum]

8. That is on them and their greed. Title. Search. Look into it. nt