The exact procedures vary state by state, including a right of redemption by the foreclosed former owner. In CA, where I live, the foreclosee has until the sale to redeem the property but cannot do so afterwards. HUD and VA and IRS liens each have different timelines.
There is also the question of the order of the lien. The most senior lien (the oldest recorded or, in some states, property tax liens automatically get first position) are NOT erased by foreclosure at a junior lien’s foreclosure auction. So the order of the lien recording is crucial as to what kind of can of worms you have bought into. They actually guarentee you nothing, not even a vacant property.
It sounds as if you’re talking IRS tax liens because of the 1 year right of redemption. In CA for property tax, its a first position lien with no right of redemption.
The IRS is norotously sloppy about things like providing legally mandated notice to other lien holders (invalidating either the sale or the erasure of their liens), that other lienholders have the right to redeem the property and other procedural errors. You offset these risks by getting a bargain price. Its the only way you can offset the risks you cite.
If buying for a primary residence, the right of redemption makes a huge difference. Some states aren’t like what you describe, but Fed sales are.
Does anyone know how to obtain the payoff of a mortgage (not my own) on a property. I am interested in purchasing a property at a tax sale, I know that there is a lien on the property, the amount & the date it was signed, but I am having a hard time getting the balance. The local tax claim bureau will not get it for me and the bank will not release it to me due to privacy acts.
If you complete the purchase, the DOS clause will be triggered by the change of ownership. You simply inform the lender that you are the new owner and want to clear the lien. The privacy issue no longer applies since you hold title to the property and can submit the recorded deed from the sale to prove it. They will then probably insist you pay off the loan, whcih is what you want to do anyway.
If the mortgage was in default, there would have been no tax lien sale since the lender is more likely to foreclose first. You may also want to check to see if the tax lien is senior to the deed of trust since if it is, you would owe the lender nothing.
I secured a fha loan in 1969 for the property on 502 dupont st. in augusta, ga. I paid off the loan but canot find paperwork to prove it. the house burned with all documents. Iam told that a ten thousand dollar lien is aganist the property, the secured deed was never recorded. where do I began to get help with this situation, help please.
Posted by Shay McDowell on April 01, 2006 at 17:21:57:
Yep. From Rich…just as they insist that you pay the loan, you insist just 4 times harder that when they insist that they follow it (right behind with the answer in Color…meaning your amount that you wanted colored different now disguised as The Truth in Lending Act or others…
Thanks for your advice, but what I’m trying to find out is the actual balance of the mortgage now, before I purchase it for taxes. I know that the mortgage was taken out in July of 2000 for $100,000. But what is not in the mortgage (which I printed the recorded copy) term in years. I would like to know the balance due to make sure I can pull the deal off. I don’t want to settle the back taxes and assement fees (its a townhouse at a ski resort) and not be able to satisify the mortgage. Are Mortgage companies willing to negotiate the balance due?
While I have never purchased at an aution before (that’s the disclaimer here) I have started looking at different properties. In one case I requested a prelim Title from a Real Estate Broker friend of mine who sent it along showing all the liens and the current balances (it was a foreclosure so the lender’s numbers were in the Notice but not the second, seller carry back, and so on). I understand that Title companies are not willing to do this on a regular basis so it would be good to find an avenue to obtain but I have not yet found anything unless you can get the info from the owner.
Posted by Shay McDowell on April 01, 2006 at 17:40:48:
Doesn’t the Payment of the parent mortgage at the sale state in the auction that all sales are final? …and that with that final sale and ((gavel)) to you…, all encumbrancing are cleared with the obtaining(s) of Title to be recorded by you? ((( your own responsiblity))) expenses’ upon others’ than the insurance’ and tax responsibility…that is what learning is all about…I bought an E-Book about Tax Lein Auctions; and it was very informative in that all the encumbrancing is cleared when you pay for the property EXCEPT the Right to Re-claimation applies that up to one year the Owner can still obtain the property (paying the taxes owned on the property as the record of the sale will be left behind with your name and address on it so they can find out who bought the property and approach them with a cashiers cheque…and when you accept the check you have to move …besure to ask for some room or they can evict you with a Sheriff !
… seems unfair … because the Seller defaulted in the first place…but the rights and privacy of the order of the purchase in the eyes of the Law fall into a catagory that hs no superceedance with the reverse - order; in that the law finds for the original Owner if they come back with the money to pay within the years time they have to honor the letter of the law to be in compliance with the Constitution and Declare it that way with force if need be …put your thinking cap on when someone comes back to you with cash in hands and make sure that you get your money’ worth in terms and time(conditions) when you are faced with the problem if having to obey the law…but do not argue ! That spoils it…and can lead to stain of your reputation and the care and concerns (the Official Presence to do a Job by the Officers and Opinions over us in control in a Peaceful manner) be polite and be kind ::, don’t appear on the defensive or OH BOY !.. .