Tax Sale Guide Home
Mortgage Oweing
Chapter: TERMS
bron3003
I dont really understand if someone has a 140,00 mortgage on there property and it comes to a tax sale who pays the mortgage? Shouldnt the bank get the house?
frank
n most cases, the banks will come up with the money at the last minute to cover the taxes. In so doing, they effectively increase the amount of the mortgage, and then take action to forclose on the mortgage.
In rare circumstances, where there are other things that affect the value of the property - such as outstanding lawsuits, crown liens, encroachments, contamination, property condition, market conditions, etc., then the banks might not take that action. They wouldn't want to throw good money after bad.
Don't forget, we are talking about a relatively small percentage of properties that end up in tax sales, and even then not all of them even have mortgages on them - I've purchased three and none of them had any liens whatsoever.