Interested In Bidding On A NJ Property On HUD But Shows Tax Lien Purchased By 3rd Person
home listed for 325,000..
a new yorker bought a tax lien for 500 approx.
the home was sold at sheriff sale ....it shows selling price ....did the lender buy it for that price....but now it shows as HUD foreclosure listing. Can someone please educate me the process.
Should i worry about the tax lien before bidding?
The investor may have paid only $500 for the tax lien. A tax lien is simply a lien -- an IOU, a debt -- it is not the deed. By buying the tax lien, the investor also bought the right to foreclose on the property if the lien is not satisfied by the end of the redemption period. If the lien is satisfied, the investor will get his investment back plus interest.
If HUD has already foreclosed on the property, and fails to sell the property by the end of the tax lien redemption period, the tax lien holder can foreclose.
Chances are that HUD will sell the property and pay off the tax lien long before the redemption period ends.
thank you so much.
i also learnt most HUD homes are FHA defaulted loans hence goes back to the Feds.
BTW, it showed a selling price of $187k not $100 at the sheriff auction..
i am just curious ....what does that mean. was there a bid war going on?
[ Edited by mp_investor on Date 05/14/2009 ][ Edited by mp_investor on Date 05/14/2009 ]
Most of the time I see an outsized bank bid on a property there is an underlying cause, having nothing to do with competitive bidding.
A prime example would be an IRS lien that gives the IRS a right of redemption at the bid price. In that case it is prudent for the bank to bid their entire judgment, sometime incluing additional carrying costs beyong the judgment amount.
[addsig]