Please Explain This...
"If the property owner does not every pay their delinquent tax bill, you, the investor, get to keep the entire property for only the taxes owed, often pennies on the dollar. "
What happened to the 1st or second mortgage on the property?
How can you get the whole property without satisfying the mortgage liens on it in addition to the tax lien?
Please clarify if you will. Thanks.
Technically you are correct, howeverr, assuming that there is intelligent life at the mirtgage company or bank, If you had a loan for 80K ion a property, would you really let someone else wipe you out for $800 in back taxes? Of course not. You will purchase the property at the sale, if the property is in a deed state, or you will satisfy the lein when the certificate holder begins the foreclosure process. Thats why 95 to 98% of the properties are redeemed.
What makes them an attractive option for the masses is the security and the rate of return. It's difficult to get as better return with a mutual fund right now.
Good Luck,
Jeff
So you still have to get financing and get rid of that 1st mortgage loan? How about the second? or third?
This whole thing makes it sound like you can buy property for $10,000 that's worth $50,000 or so...but you do have to take care of the mortgage liens, right or wrong? Are there any sites that cater to listing TL properties you can bid on? Similar to a foreclosures site? I think I am way off here...pardon my lack of knowledge about Tax lien properties.
Hey guys,
Tax liens were explained to me this way. The bank is notified of the bill they have the option to pay it to save their position before the sale (I am in Minnesota). at the sale anyone can bid. All liens except for taxes (Federal, State, local) are gone.
You can get it for pennies on the dollar but that does'nt happen very often. Hope this helps....
In tax certificate states, You pay the back taxes, the county issues you a tax sale certificate. That certificate gives you the right to foreclose on the property after a specified period of time, if the Back taxes and interest have not been paid. That period of time varies from state to state and sometimes from county to county. Its called a redemption period. If the owner of the property, or one of the junior leins satisfy the first lein (Your Certificate)simply by paying the taxes owed, and the penaltys to the office having jurisdiction where your certificate was issued. That office then writes you a check, and thanks you for your part, and there is no more tax lein, they can resume their position as the 1st lein holder. You go away with reimbursement for your investment and a nice rate of return on your investment. you're done at this point, and go look for another one, if you wish. If no-one with equitable interest in the property redeems the tax sale certificate, you can foreclose on the certificate get a deed for the property, and the prior mortgagees no longer have a position in the property. They are wiped out.
99% of the good mortgage companies have a contract with a tax service company that will monitor unpaid delinquent taxes in their portfolio. Whenever there is a chance that a property may go to tax sale, the bank/mortgage company will pay the taxes and may then initiate foreclosure proceedings (they will if the loan is delinquent), they may not if the loan is current but they will request repayment ASAP. I work for a bank and I see that very, very seldom do we ever lose properties to tax sales. If we ever do, the company that monitors our taxes will pay us back because that was their job. Having said this, I think that the majority of the properties that go to tax sale are either in awful shape or in bad neighborhoods, or they don't have a lien on them and the owner is a)deceased b) in prison or c) incompetent due to a health or mental issue. There are some properties out there but not as many as you would think. Good luck!
IT sounded like a too good to be true thing. Why would bank nowadays not pay a small amount of even any amount of taxes to protect their interests? They will just mark up the property and pass it on to the realtor who then passes it on to the consumer, who thinks he or she is getting a deal when they see the word "foreclosure" in the newspaper ad. In Utah I see this all the time. A lot of unsuspecting buyers are buying properties as "foreclosures" for fair market value. What a deal!
The taxes on my home are paid by my mortgage company out of my escrow account. I believe most mortgages are structured this way.
Mike in Louisiana
Mike In Louisiana,
Many mortgages out there are not all inclusive. The most basic will cover PI (Principal and Interest) only and the homeowner is responsible for Taxes and Insurance.
So it appears the major benefit to buying tax lien certificates is to make some interest, paid by the county/state?? Since most will eventually pay their back taxes or the mortgage holder will pay the back taxes to keep from losing the property. Is this train of though correct?
Is there just a normal APR?
Quote:
On 2003-09-15 06:27, StatHaldol wrote:
The taxes on my home are paid by my mortgage company out of my escrow account. I believe most mortgages are structured this way.
Mike in Louisiana
Dont trust Washington Mutual to pay your taxes or insurance. If they screw up, they are unwilling to take responsiability for there mistake and will make you pay for there mistakes. They cost me $1600 because they didnot pay my insurance policy and forced there BACK DATED insurance on me, one year back dated. So, the moral is, dont trust washington mutual with your taxes or insurance.
I just attended a "Deed" Tax Sale or as the state calls it an "UpSet Sale". I purchased a home on just back taxes owed to the state, and filed the paper work to get the Deed. I just received a phone call from the current Lending Institute (Bank). Apperently the forgot to pay for the taxes. They gave me three options:
1. They will pay me for the back taxes
and fees that I paid.
2. I can pay the full amount on the
current mortgage owed to them.
3. They can add my name to the
Foreclosures procedure which is
currently in process.
I really don't want to lose this property, but again I don't want to assume the Mortgage. Please advice as to what can be done in this situation.
Why wouldn't the Bank be SOL in this situation?
This is a link that explains how things are done in my area. Check with County treasurer where the property is located and they will likely walk you through the steps and answer questions for you.
http://www.oklahomacounty.org/treasurer/LeinSales/LIENSALEINSTRUCTIONS2.htm
OtilioNJ,
Check with the Property tax Diision where you got the lien, and check the position of your lien. If yours is in first position, you are in a pretty secure position. Their foreclosure shouldn't affect you. I think I'd seek legal council just in case, I'd hate to give you bad info.
Good Luck,
Jeff
Thanks, I will contact the Tax Division and ask a couple of questions, but in the mean time...
What usually happens if the mortgage company forecloses on the property and I have the Senior Lien on the Property.
Also, aprox how long will this process take?
Is it a possibility that I may loose my initial investment.
See an attorney in your area is my advice.
But, the mortgage company is not going to be able to sell the property with a tax lien against it, big title problem, they will pay the tax lien.
In Texas you would need to do a little research on the properties you are wanting to buy. If they have a mortgage lien on them then you assume the lien and are responsible for it. Really the only time you get the "pennies on the dollar " is if the property is free and clear of all debt.