Title Aspects of Foreclosure Sales: Clearing Confusion

The circumstances which can cause dismay or confusion on the part of a successful foreclosure sale bidder not infrequently arise as follows: after the property is struck down, the bidder wisely orders a foreclosure title search. The goal, of course, is to clarify the title being conveyed, list any objections or infirmities, and provide such insurance as is available. That search, however, will often raise a host of issues. When some or all of these are related to counsel for the foreclosing plaintiff, the response is often that the title being conveyed is what the bidder bargained for and no remedial action need be taken. What then?

Viewing this in general theoretical terms, determining the nature of what devolves through a foreclosure can be enlightening. With that perspective, the result of a foreclosure sale is to vest in the purchaser, who of course was the successful bidder or, with a very limited exception, an assignee of the successful bidder, the complete estate of both mortgagor and mortgagee as it existed on the date of the mortgage, unaffected by the subsequent encumbrances and conveyances. [Bank of Akron v. Spring Creek Athlete Club, Inc., 151 A.D.3d 1864, 59 N.Y.S.3d 214 (4th Dept. 2017)].