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But if the homeowner defaults, the bank still gets "stuck" with the bill as part of the mortgage, right?
Well, the bank gets stuck because you cannot sell the property when their is a lien against it. The new owner won't have clear title. Someone must satisfy the lien. It would either be the bank would have to pay it or the new prospective owner would have to pay it.
Assuming you get past the redemption period the new owner will have clear title. Property tax liens are superior to all other liens. Property tax lien foreclosures extinguish all junior liens including the mortgage. The only exception is if the tax tax lien holder makes a mistake with the foreclosure process. If you do discover a surviving lien you can almost always take quiet title action to have it removed.
BTW tax lien foreclosures don't have to notify the individual junior lien holders. Public notice of default and tax sale has been held by state courts to be sufficient notice.
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I was arguing with someone on Facebook the other day about Property Taxes. The issue was about how long seizure from the Government takes.
I was under the impression that if there is a mortgage, unpaid property taxes would eventually be paid by the lender, who then tries to get the dough. If they fail, then the home could go into Foreclosure. If the home is owned outright, I assume the local Government generally errs on the side of payment plans, writedowns and whatnot with a bias toward keeping the homeowner in the property.
How long does failure to pay the taxes take to result in the loss of the home in either case, and does it vary by state and county? If so, what is the high-side and low-side until it is seized?
Thanks all!