Has this ever happened to anyone…
Have you ever purchased a property not knowing that their was a title being held by a mortgage company on the property? Or would you actually do that knowingly?
What happens next???
Howdy Adinc:
Trying to understand your question. Are you buying at a tax sale? Who has title? You can not hold title. Need to do a title search to find out the owner. If mortgage company has gotten a deed by foreclosure or deed some other way then they own it. If they have a lien then they are a lien holder and not the owner. There can be tax liens and sales no matter who owns the property.
Good luck and thank you,
Ted P. Stokely Jr
11505 Sw Oaks
Austin, Texas 78737
512-301-9171 home
512-587-6177 mobile
In Texas the tax lien is clearly superior to a mortgage lien. That means that the tax sale will wipe out the mortgage lien.
Keep in mind that this is true as long as the foreclosure is handled properly. If the mortgage company is not notified of the sale (which seldom occurs) then the mortgage could still survive the foreclosure on Due Process grounds. That means the bank will argue that since they were not notified then the foreclosure was not valid. From that point a couple things could happen:
-
the tax sale buyer takes the tax sale property subject to the mortgage
-
the tax deed is set aside.
In most cases since notification falls on the shoulders of the county it is the counties fault. I have heard of counties attempting to help the tax sale buyer get thier money back.
This does not happen very often at all. Usually it will occur 1 or 2 cases out of thousands. When you check the deed records and see that a mortgage is on the property then you may want to check with the sheriff and make sure that the mortgage company was properly notified.
Its not really a big risk issue and if you do find that in the 1% chance that this has happened to you then I suggest you just treat the deal like a ‘subject - to’ transaction and rent out the property to cover the mortgage and make some money on the spread.
Again there is a very low probability that this would happen…but in 1% of cases it can occur. Is it worth doing additional research?
Probably not…its just a risk that you have manage.