investor buys a house at trustee sale then find out the prior owner had a judgment for child support via the DA (in california) which was of record (not a lien on the house) prior to the TD. The DA did not persue it because there was no equity. now Im told the DA can go after the new owner/investors equity. its assumed that the title insuance missed it at the time the TD was recorded and the new owner/investor has no title insuance. Its been said that the DAs judgment follows the property as well as the person. question. . . is this true?
addtional info, prior to trustee sale, investor pulls title seach and sees current owner name is the same common name with many DA judgments. how can the investor find out if the judgments are on the same person as the current owner, note child support DA judgment show a case number but are closed to public viewing so how can a investor be sure the property is free of judgment like this? thanks don
It is true that a Family Support Judgement will follow the property if recorded prior to the foreclosing Deed of Trust. According to the CA Dept of Child Support a Notice of Lien must be recorded with the recorder’s office in the county where the property is located. The recorded lien gives subsequent purchasers and encumbrances constructive notice. If there was a recorder lien and then the Deed of Trust was recorded that lien would be superior to the Deed of Trust and would need to be paid.
wouldn’t the “lien” have to be recorded as a lien on the property which of course would be in the name of the person who owns the property? Which would show up in a property title seach? In other words if the only recorded lien ON THE PROPERTY, nothing prior to the foreclosing TD on the property, then I would think the title would be clean after foreclosure.
If the lien was recorded prior to the Deed of Trust but after they purchased the property then it would run with the property. If the loan was a purchase money loan and the buyer had a previously recorded family support judgement then, I am told, the title company would insure that property after a trustee sale without having to clear that lien. If the defaulted loan was a refi and the title company missed that when they issued the lender policy on the refi then you as the investor may be required to pay that lien. The lender (if they foreclosed on the property) would have a title policy to cover them.