What happens if the property has a Mortgage or Liens on it?

What happens if the property has a Mortgage or Liens on it?

This is common question that we get, however it is uncommon for the property to even have a mortgage on it in the first place.

The reason why it is an uncommon scenario is that the county waits anywhere from 3 to 5 years before taking the property to a tax sale whereas a mortgage company can foreclose (and typically do) in less then a year. If the mortgage company foreclose the county taxes are paid and the property is no longer delinquent.

But lets say the mortgage company doesn't foreclose for some reason and the county takes the property to auction in 3 to 5 years and the property sells at auction. Well in this case both the owner of the property (prior to the auction) as well as the mortgage company have the right to claim the excess proceeds. If both file a claim then the county will usually give it to the mortgage company and the owner gets the remaining excess if there is any left over. But again this is assuming that the mortgage company claims the funds. If they didn't foreclose in 3 to 5 years then it is a very low likelihood that they will go after the excess funds.

But lets say they do. The worst case scenario is that you lose your investment into the property (which should be only $50 to a few hundred dollars).


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