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35 tax foreclosures

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Tax Foreclosures occur when a home owner has failed to pay his property taxes and the county seizes the property through a tax foreclosure. Although each county may vary to some degree in regards to the detailed steps, the overall process is virtually the same everywhere.

Much like the mortgage foreclosure process, tax foreclosures must go through the same overall process. Namely the county must:

1. Publicize the pending sale in a local publication for 30 days prior to the sale.
2. Notify all interested parties (home owner, all lien holders, etc) via certified mail.
A. Typically they must send three separate certified mailings.
3. List the amount of past due taxes for which they are foreclosing.
A. This amount will be the opening bid.
4. List the properties minimally by Legal Address, and in some areas, by Physical Address as well.

All winning bidders must be able to pay the entire winning bid in cash or cashiers check on the day of the sale, or in some areas, within 24 hours of the sale.

Most areas will either have one tax sale each year, which is typically held late in the fall, or they may have tax sales on a semi-annual or even a quarterly basis. You will need to contact the county offices in your area to verify the schedules for their tax sales.

One important distinction between a tax foreclosure and a mortgage foreclosure is the tax foreclosure will eliminate all mortgages to include first mortgage. In other words, if a person defaults on their taxes while still paying their mortgage, not only will they lose their property, but the creditor that holds the first mortgage will lose their claim to the property rights along with all the subordinate mortgage holders (seconds, thirds, etc). The only things that will carry over from a tax foreclosure are mechanics liens and a federal tax lien. This is why any mortgage holder will typically step in and “cure” the taxes before the sale so they will not lose their interest in the property.

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By Robert Johnson