tax sale -lender prospective

I wanted to ask you guys something, are tax sales woth attending I mean if there is a mortgage on the property, wouldn’t the lender just advance money needed to bring the property taxes current, rather than let their loan or loans be “wiped out” from a tax sale thus stopping the tax sale (they most likey add that to the amount owed on their mortgage, file a NOD and finally foreclose right??)- I mean I’ve yet to go to a tax sale but after hearing alot of tax sales this and tax sales-ppl are getting steals…lol all that crap by my friends I’m kinda getting tired of it.

I’ve never attended a tax sale. I purchase tax certificates though, and do it strictly for the interest. (CASH) I’ve never heard of the lender savig the property. From what I hear it is cheaper for them to let it go. No banks wants to hold propertys. I once heard that they have to hold 3x’s the amount of the price in revenue if they keep the house.

See what I dont get is if I’m a lender and I have say 400k mortgage still due on a house worth 550k and we’re @ tax sale (since tax liens, from my understanding take senior position to all other) I would glady pay few 1g’s or whatever to keep my interests safe so I could then foreclose (adding whatever amount I paid in the the mortgage due) and then trying to have it sold through auction…if the auction thing doesn’t work out I could have my house(reo) listed with a agent who deals with reos…(if the tax sale goes through-it wiped out all other liens including mine…which would be a no-no in my book.)

and what do you mean by banks holding 3x the amount of the price in revenue if they keep the house.

I was once told that the bank has to put 3x’s the amount of revenue on hold to cover any property that is bank owned. That means if the house is 100k , the bank has to hold back 300k. That’s money that can’t be lent out. I may be wrong. Thats just what I’ve been told. Also, the lender is in the money business not real estate. They’ll just have to write it off or somthing because that could bring up too many legal issues between the owner and the bank. It sounds logical for the bank to pay it in order to save it’s investment but, not likely to happen. At least, I have never heard of it. :stuck_out_tongue:

Howdy Thetony:

You are correct. Most lenders will advance the money and in fact most do not even let the property get posted. But then there are some that slip thru the cracks. I had a second mortgage of $9K that I bought for $4K once upon a time. The borrowers lost the house I assumed to the 1st lien holder. I wrote it off so to speak as the money to cure the default was too much. I learned later that it got sold for back taxes and the lien holders could file for the money the county received over and above the taxes. I again assumed the 1st lien holder would file to get the funds and it would be a waste of time for me to file. I did let the BK trustee know about the sale as the lien was part of my BK estate and he would be the one to file.

thanks- tedjr

I knew the banks would do that…because it just makes sense…I’m gonna try and atually go to a tax sale and see for myself…I think I’d be better off investing in tax certificates (if only my state wan’t a taxdeed state :P)

@ MsFLinvstr

About the part “No banks wants to hold propertys”- I found out that Bank Of America started rehabbing some of their REO to sell @ retail, well at least in NY. MsFLinvstr if you dont mind me asking, what are the interest rates you get with certificates in FL? probably like 15%?

15-18%. I normally go for the ones that slip through the auctions. ***Homesteaded properties that weren’t elgible for auction because they had not reached 100.00 bucks in owed taxes. I purchase over the counter every month and get all certificates that have reached 100.00 and don’t have taxes owed from previous years. When you do it like that, it automatically defaults to the maximum int rate which is 18%. It adds up quickly. I normally buy about 9-12 per month. I go to the auctions but, you get int rates like 5,6,7,8%. My intent is not to own the properties but if I luck up, that would be great. Whoever bids for the lowest int rate wins the parcels. This is in Florida by the way. Every state is different. It takes some time to go thru the list and find the properties, county online datatbases makes it so much easier.