Tax Liens Sales

Tax Lien Cretificate non-payment?

If I invest in a property tax lien and the property owner does not pay off the tax lien, do I get the property free and clear (after going to court and such)? What about if the owner of the property has a mortgage out on the property? Do I take over his payments on his house or is the bank out their money?

Public Comments

1. If you take possession of the house you also assume the mortgage obligation. If you don't, the mortgage company will foreclose. It is also possible that if you take possession, the mortgage company will want to be paid in full. I'm not sure about this and it may vary by state, but a mortgage company may not simply accept a new debtor. Since the title would change from one owner to another, you may have to refinance and pay off the existing mortgage.
2. Yes, you would be obligated to the existing mortgage. However, you can mitigate this by doing excellent due diligence. First, you can buy a tax lien on a property which you know the delinquent taxpayer will redeem. Also, you can go to the local recorder of deed's office and find out what liens, mortgages, encumbrances, etc. are on the property. If you are a beginner to this type of investing, I would recommend this site: http://www.taxsalewealth.com. It details the tax lien process exhaustively, and it gives a breakdown of all the participating tax lien states' laws.
3. This depends on the state that you live in. In the state of Florida, where I live, the properties are put on auction. If nobody bids on the property, then the property goes to the Tax Deed holder who had a tax lien certificate and paid off other tax lien certificate holders to get the Tax Deed. I understand that some states don't auction off the properties though.