You must be wondering what this foreclosure thing is all about. The answer to this question is not a simple one, but once you come to terms with the procedure, you will see that it is not a too complicated thing.
The idea is that if no one pays on the property that a lien was purchased on, a tax lien foreclosure is what happens. The only situation when a tax lien foreclosure will not happen is when the lien is on a reasonable piece of property.
But under what circumstances will you be paid before a lien is foreclosed on?
The first situation is that of the second lien holder of an existing lien on a property. This means that someone else owns the first year's taxes, and you only have the second year of property taxes. If this first holder buys out your position, then he will be able to foreclose on that property.
Another scenario would be that of a bank holding the mortgage on the property and the loan being in default. In this situation, the bank will foreclose on the mortgage and in order to do that, it will have to pay off the lien that has a first position above the mortgage, otherwise the bank will lose the property to you.
The third situation is rather similar to the second one, with a single difference: the loan is not in default and the property tax is not paid anyways. If no one pays off the property taxes before the redemption date, the lien holder will have rights to the property. To deal with this scenario, the bank will pay off the tax lien holder.
So, should you intend to foreclose on a lien, there are two different ways to accomplish that, based on the state that the property is located in. The first method consists in filing with the state to force a foreclosure sale, thus putting the deed up on auction to be purchased by an interested party. But there are states that do not hold this sale for you. In these states, the second method of foreclosing on a lien is being applied. The procedure is to notify the county that you wish to foreclose on the property. The following step is to send legal notices and to fill out the papers. After the filing of these papers and waiting for a certain amount of time, the property is then legally yours. |
