I'm looking into purchasing a foreclosure that is being sold by a trustee at a courthouse auction. I did some research on the property (via RealtyTrac), and it seems like there were quite a few loans taken on the property. From the records there appear to be 3 mortgages (assuming 2 are refinances) the last for 314k. Also, there appear to be 3 HELOCs on it. The last one in 2008 for 64k. Can't tell for sure but It appears that the foreclosure was initiated by the 64k loan which seems kinda strange. I know this scenario is not for the faint of heart, but I want to do my due diligence to figure out if this is a possibility.
Let's say I do a title search, and the title comes up clear without liens. Now let's say that I go to the auction and bid on the property, and my bid is accepted. Am I in the clear once I pay the cash, or is there still the possibility of getting screwed? From what I understand, everything is subordinate to the primary mortgage or loan, any proceeds go to that, and if there are additional funds left, the money goes toward those loans. Also from what I've read the HELOC loans are actually still on the individual even after foreclosure. So other than the possible condition of the structure, and the potential difficulties with owner occupation, are there any hidden pitfalls? If there are no current liens on the property, is there any way that I would owe additional money after foreclosure?
FYI The property is located in NY State ( Colombia County )