I ran across an interesting fact in a recent transaction that is worth sharing. I represented a buyer who was purchasing an REO property. Upon getting the Preliminary title report there were many recorded liens.
The previous owner who had been foreclosed upon had a very common name so many of the liens may or may not have been for this person. To make sure the title was clear it was necessary to obtain the SS# of this person to identify if in fact the liens belonged to him. That in itself was a challenge getting the information from the lender due to their swamped situation.
The important thing - one was an IRS lien which as you know comes before anything else. Apparently you must wait 120 days after the date of the foreclosure to remove this type of lien. So as a buyer you do not want to close escrow until you are sure this lien has been resolved. The bank that foreclosed did not record their foreclosure immediately ( Actually the foreclosure took place in Oct but was not recorded until the end of Feb. It seems the lenders do not always want to immediately show how many foreclosures are on their books. In this case, it was a Countrywide loan)) We had to have the title company keep checking for the deed to be recorded so we could determine the exact date of the foreclosure so we could start the 120 days countdown.
This was a unique situation but definitely one to know about. I have to give the title company credit for alerting me to the situation.
Moral of the story- read your prelims. This occurred in California so I'm not sure how other states handle such situations when attorneys are involved.