Tax Lien Sale with Mortgage attached

[Brandon Lamb]

Hello,

Looking at tax lien sales in WY, and the county i'm looking in has a 4 year redemption period. The legal owner or mortgage company of the property sold at the sale is entitled to redeem a Certificate of Purchase at any time within four years from the date of the tax sale. To redeem the owner must pay the amount of the Certificate of Purchase, a penalty of 3%, any special assessments attached to the lien, plus interest on any principal amounts at 15% per annum. Upon payment the owner will receive a Certificate of Redemption, which released the lien created by the Certificate of Purchase.

Would like to know if you are the winning bidder of a lien with a mortgage filed, after the 4 year period what would happen to the mortgage. Could the lender foreclose on the property while I'm waiting the 4 years? 

Is this the case for lenders below?

Lenders' Options

If the property in question is security for a deed of trust or a mortgage, the lender most likely will not step aside and allow you to foreclose or receive a tax deed. Because the lender isn't a priority lienholder, it will lose its interest in the property if either of these things occur. Therefore, the lender must receive notice of the initial auction when the tax collector sells the certificate, as well as notice of the redemption period if the certificate is sold Typically, the lender will step in and outbid you for the certificate at the initial auction so it can protect its interests. If it doesn't do so, most states allow mortgage lenders to redeem the certificate themselves if the property owner does not do so. Either way, you'll get your money back plus interest – but you won't get the home.