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California Pre-foreclosure Investing and Foreclosure Sales – Do you know what's on record? Part II

February 13th, 2007 · 2 Comments · Foreclosures, Mortgage Fraud - Elder Abuse, Trust Deeds

Often times, a preliminary title report will show recent transfers.  Generally, the prelim lists those made in the last two years.  If it’s not on your title report, you should request it from your escrow officer.

Why are previous transfers relevant?  Frequent transfers are a red flag that any prospective buyer should be wise to pay attention to.  If they are from an individual to their trust, that is fairly common.  If you see a back and forth transaction between the same individual multiple times, watch out!  That could a flag for fraudulent transfers. 

Sometimes a debtor will deed a property between family members or their spouse in order to hinder, delay or defeat creditor collections of judgments.  In California, a fraudulent transfer can be set aside by the Court many years after the discovery of the fraud. 

Other times, what may appear to be an innocent transfer between family members may also be the result of elder financial abuse–and those transfers are generally void ab initio, even as to bona fide purchasers.

Don’t take what is on the public record at face value.  If you are a potential investor, purchaser, bidder or lender–it is prudent to make inquiry and see an experienced professional who spot these potential pitfalls and minimize your risk.



2 Comments so far ↓

  • John

    Foreclosure victims should also be concerned about the danger of the bank suing them after foreclosure and trying to take the new house or attach a lien to it. If the house does not sell at sheriff sale for an amount to pay off the defaulted loan plus the extra foreclosure costs and late fees, the bank may be able to sue for a deficiency judgment and come after any other assets owned by the former homeowners. The bank will have to proceed with a new lawsuit after the foreclosure process is over, though, which will cost them additional time and resources.

  • Preforeclosure

    Thanks for sharing your time and information with us! It was a brilliant reading! Thank you.

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