Why would the owner give a third party a grant deed before auction

We’re looking at this house that is up for auction. The owner apparently gave a third party a grant deed to the house in january 2010. They owner received a notice of sale back in October 2009 and the auction is scheduled for April 2010. Is this a method to prolong the foreclosure process?

Yes it is…

I’m not exactly sure how it delays the foreclosure process. Does that mean you need to send the eviction notice to the person on the grant deed (who would be difficult to find since they don’t live in the house)? Or is it set up so the person living in the house is a tenant and you have to give them 30-60 days notice to terminate their lease/rental agreement?

They may have intended to use this as a stalling tactic but it is not effective. The lender will still foreclose on the Deed of Trust that was filed against the property regardless of who is currently the owner of record. If the bank takes the property back at trustee sale they would be obligated to make contact with the current occupants to give them notice, negotiate cash for keys or start the eviction process based on the current laws of that state.

You’ll see this from time to time. There are a variety of preforeclosure scams that involve getting the deed to the house. Will likely have little or no effect on the auction process.