Title Research. How To Read Deed Of Trust?
I'm just started investing forclosures. During my research, I read lots of deed of trust. I'm still not sure how to distinguish 1st vs 2nd vs 3rd lien. 
Contractor's lien is pretty obvious. I can tell when they have had refinance. But it is not always clear to me which is the 1st lien.
Anything that will help this novice understand better is appreciated.
Thank You!!!
I would also love to hear what some of the experts have to say about this. I'm having the same kind of problems. Half the time i don't know what I'm looking at. I've been searching the boards for something along these lines and I still have not found anything. Does anybody out there have it in there hearts to help a couple of NEWBIES out.
More often than not the actual trust deed will not say if it is a 1st 2nd or 3rd. You need to follow the chain of title from ownership changes & learn how to understand when a trust deed is still outstanding & a lien against a property & when it has been paid off & the corresponding recorded documents used to reflect that.
I used myself as an example on the web-site of the Recorders office. When I use my own name, the exchange of Deed shows up along with the time that I refinanced it. Also everytime the lender sold the Mortgage to another party it's there. When i use the Womans name who sold me the house, all that shows up are Deeds. Now all of the names other than myself are from the same family as far back as the records will go. Now, does that mean that I can assume that the family owned the house outright and they just kept passing it down the line and had no need for a mortgage?
If this is correct, I think that I figured it out. If not , I still have a lot to learn.
[ Edited by wishbonejones on Date 01/06/2004 ]
You are getting very close. What you are reading is what in Calif. is called the Grantee/Grantor Index. aka The Chain of Title. If you see a lot of the same last names and no refinance you are probably in a rather conservative part of the country. Another indication that the area is conservative is that the Mother and Fathers of the children all have the same last name. An item I am sure the children will approve.
Most lst paper is from a lending institution and if the recordings are well done they list their position on title.
Most secondary paper used to be all private party or some outfit such as Budget Finance. However nowdays banks are getting rather heavy into equity loans which are mostly second on title and occasionaly third where the property was purchase with two mortgages to cut down the amount of downpayment.
In my time I always marked my paper as to its position. I did this as there is always the possibility of some Title Company Searcher missing the priority of the Deed.
You will after awhile if working a specific state or county begin to recognize the players and it will all fall into line. You can if in doubt always call the title company and have them give you a Preliminary Title Report or perhaps just a Property Profile which should list all the goodies.
Hope this is helpful, rather boring reading and will never replace Pilgrims Progress as light reading.
Enjoy Lucius