REO Properties - Posted by Kevin Moss

Posted by Kevin Moss on January 10, 2006 at 10:45:41:

The state is Pennsylvainia. Does that help?

REO Properties - Posted by Kevin Moss

Posted by Kevin Moss on January 10, 2006 at 09:33:03:

When a bank takes possession of a property, Do they assume responsibilty for all outstanding liens,taxes,ect…,or can they pass them to the next buyer? My quess is that they have to provide clear title, but I do not want to quess.
Also, are there any other issues that I have to be aware of?


Re: REO Properties - Posted by David Krulac

Posted by David Krulac on January 16, 2006 at 22:44:13:

in Pa. if a bank acquires a property at the Sheriff Sale, junior liens and judgements are wiped out (unless the junior bids at the sale to protect their posiition). Real estate taxes and Federal Tax liens are NOT wiped out.

The exception to the above would be that a lien is NOT wiped out if the lien holder did not receive proper notice.

I had a case where there were both a second and a third mortgage. They were both institutions, unrelated but with similar names. One was something First National Bank , and the other was something like First National Mortgage Company. Totally different companies in different states, no connection between the 2. One was notified and the other was not because the attorney doing the Sheriff sale thought they were the same. The one mortgage was wiped out and the other was not.

Re: REO Properties - Posted by Frank Chin

Posted by Frank Chin on January 11, 2006 at 07:55:02:


I’m in NY, I’ve bought REO properties here, and the “operative phrase” is the “property sold free and clear”.

This means that there are “no liens or taxes outstanding”.

One REO I got was one of four that a developer built before going bankrupt during the last RE crash here. I searched the public records and found the house next store was sold by another as an REO for 215K. I decided to bid no more than 225K thinking I overpaid at 227K, but got it “free and clear”.

Some years later, I was chatting with the owner next store and mentioned that he did better than me buying it an 215K. He said that the house came with leins, unpaid taxes etc., that he had to settle for another 35K, so he actually paid 250K for it".

Technically, as to the REO I got, the title when I took over was in the name of the “bankruptcy trustee”, and the bank actually never took it over. They paid off all the leins and taxes as part of the sales transaction though.

Thinking about it, it was smart of the bank as they avoided legal liablity had they taken over as the owner. On top of which, had they not agreed to paid off the liens, I don’t think they were ever responsible as they never took title.

Not a legal opinion as I’m not an attorney.

Frank Chin

Re: REO Properties - Posted by River City

Posted by River City on January 10, 2006 at 10:29:38:

That would depend on individual state laws and also the agreement between the borrower and the lender.