Posted by Kevin on September 26, 2003 at 15:40:14:
some states allow reclaim of property in a tax sale with only paying interest.
Note secured by 2 props-1 sold at tax auction - Posted by Kristine-CA
Posted by Kristine-CA on June 23, 2003 at 15:20:26:
OK. Here’s one. There is a woman who wants to sell me a note that she is carrying for a buyer of two
adjacent properties that she sold 8 years ago. The seller is totally clueless about the paperwork and did
very poor record keeping.
But now that I’ve seen the deed of trust, it turns out that the buyer let one of the properties go to tax
sale. So now the note is secured by only one property, right? It looks to me like the buyer/payor (or a
relative) bought the tax sale property for next to nothing. There will be little or no excess proceeds.
The buyer/payor continues to make payments on time on the original note. So, by letting the property go
to tax sale and continuing to pay on the full value of the note, he isn’t saving himself any money. Can’t
quite figure out what that’s about. The remaining property is also tax defaulted, but not yet due for tax
sale. Perhaps he is planning to let this one go to sale as well and get out of the note?
Anyway, the holder of the DOT just wants out and she and her husband really understand nothing about
the note. And the tax sale episode put them over the edge.
Is a DOT still valid if part of the security is missing? Does it need to be rewritten? I can get it at a
substantial discount and it’s a pretty good seasoned note. Except for the collateral issue. 
Any thoughts? Sincerely, Kristine