Hi everyone
This may be a dumb question but if your checking a list of foreclosures arn’t they already foreclosed? How exactly do you find a pre forclosure? buy checking tax leins? thanks for any help
Brad k
Howdy MikeRIP:
Property already foreclosed and owned by the bank is called REO’s. If it is posted for foreclosure it is a preforeclosure and will be sold at the courthouse steps on the first Tue of the following month (here in Tx and many other states) These are posted on the courthouse walls 21 days prior to the sale or earlier sometimes. Tax lien foreclosures are properties that the county has posted for foreclosure due to back taxes. The county posts a list and some also have online sites too.
Some companies provide a list and even online searchable preforeclosure list for a monthly fee. They are at the courthouse the first Tue too tracking sales etc. Do a Google search to find them or ask other investors in your area
Hope this helps splain it
2 totaly different world’s…
tedjr explanation is good but you really must know what you are doing before you ever start investing in tax liens.
Join your local REIgroup that is were you should start.
Good Luck
OK… what happen if a property has both Back mortgages and Tax lien on it?
I can purchase the tax lien, but ultimately the bank still has the upper hand with the back mortgage? They can foreclose a property but what happen to the tax lien that I purchased? do they get wipe out with the primary lien?
And on the other hand, if I offer to purchase the property and have them to sign the deed out to me. Am I still risk on the Tax to foreclose and I ended up pay for the tax lien?
Always boggle my mind with this foreclose business.
Ant.
Thanks Ted for clearing that up for me, ok say I go to buy a pre forclosed property, do I pay for the back payments to make them current or give them the money so they can if Im doing sub 2? This only concerns me because what if I make the payments and they see it’s a different name on the check the loan might be called do, or if I give them the money to bring the back payments current then they take off with the cash not paying the payments? What should the procedure be in this situation? thanks for your help
Howdy Mikerip:
Send cashiers check to the bank. You can put the owners name on check as remitter. Make sure you do title search. I do not even think it matters who sends the money. Folks get money from charities, churches, god parents, rich uncles etc to pay their payments.
Howdy Realstart:
It can be confusing. Most mortgage companies will step in and pay the back taxes and then foreclose on their lien. When they do not and the property sell at the tax sale the buyer gets the property free from any liens that the owner borrowed. Other judgements and liens may still be attached. The mortgage company or companies must file proof of claims to the taxing authority to apply for any excess funds.
A mortgage foreclosure has no effect on taxes due or others liens except where the owner borrowed on the property.
Hope this helps some.
So to make the long story short.
If I buy the property off a bank, they took care of all the liens already. Nothing to worry about.
But if I buy the property off tax sale, Only the tax portion is satisfied. Other lien might try to foreclose the property (ie banks or other liens) and they will have to buy your tax lien back with interest before they can foreclose the property.
ie I wont loose out on the tax lien, but I wont gain possession unless I wait 2 years and foreclose the deal myself which it rarely happens if they also owe mortgage on it since the bank will step in and try to pay your tax lien off.
Ant.
Howdy Realstart:
You have the tax sale mixed up just a bit. The tax sale has priority over the mortgage company and all liens where the owner borrowed money against the property on a voluntary basis. Liens for iRS county, courts will still be against the property, at least some or most. I too am not sure about all the mess here. The taxing authority will notify all parties if they have received excess money from the sale and then the lien holders will have to file with the authority to get paid on their lien. You will get a deed free and clear of the mortgages but not other liens that were involuntary.
With tax sales you get a deed and have all the rights of ownership except the previous owners right to redeem the property. This varies from state to state and if the property was a homestead or not.
Only the previous owner has the right to redeem and they must pay the interest. You will get a deed at least in Texas and other states that use this system and not tax certificates.
I hope I have not confused you even more. Darious has an excellent course I have heard and if you are serious about tax lien investing I would want to learn from one of the best if not the Godfather