This article by by Colin Said of the San Francisco Chronicle tell the story of a couple who purchased a trustee's deed to a home in Santa Cruz at auction. Little did they know, they bought a second mortgage on a foreclosed house, that has no actual value.
The article states that Roberta and Randall Stand paid $97,606 for a house at a courthouse auction. They gave the home to their daughter and her fiancé, who in tern, spent over $13,000 fixing it up. Months later, a notice was posted on the door stating the home would sold at auction. After much litigation, Wells Fargo and the couple settled for an undisclosed amount.
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2010/08/01/MNRU1EL529.DTL
This just goes to show that you really need to do all the research when you are buying anything from an auction as there are no guarantees to title or condition.
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