will lender foreclose because of late taxes?

Question

I have a close friend who I am trying to help,get info for.

They state that they are unable to pay there taxes right now.  they are NOT escrowed and were to be paid as accrued.

Anyway they wonder IF lenders file foreclosure,or what is the process when lender is notified taxes are still unpaid??

Minimum time allowed to fix,,,max. time allowed for fix??

They state they are current on their payments but have slid from 1rst of month payment to end of month pay!!

Do lenders go after borrowers when they are half a year behind on taxes? or 1 whole year?? Or does it take a longer period to incur their wrath??

I said they didnt want lender to get wind of this because payments will escalate 3 fold.  Once because they paid out funds,once to escrow for next year and another to cure shortage of escrow balance!!

Thanks for ANY words of wisdom for them!!-d-

Just Don · Answer

thanks for your quick reply Jon.

I was thinking there surely was a default clause of some sort built in for failure to pay taxes and or insurance??

Jim Gordon · Answer

The lender can not just add escrow payments to the loan they have to live by the contract also. That said there are escalation clauses in the note. Keeping current on property taxes is one of the most common because the county can sell the property and the lender is left out in the cold. 
If they are paying at the end of the month instead of at the first they are already running late in the eyes of the lender. 
By the way there is no wrath involved just plain old sense. If the people are falling later on their payments and they can not pay the taxes on the property how much longer until they can not pay on the note.
If they are a OO they should try to get a loan mod to save the property. They can call the lender themselves. Beware of loan mod boiler rooms that charge an upfront fee.

Jon Holdman · Answer

If their loan is not set up with an escrow, the lender can't arbitrarily add an escrow.  I don't think the lender will care one way of another.

Steve Babiak · Answer

You are on the right track in thinking there is a "default" event for certain missed payments, with the property tax among those.  Why don't you get the loan docs from this person (or from the county recorder) and read them to see what might happen?  And do keep in mind that there might be two possible ways for this to be handled by the lender, one of which is for the lender to make the payments so as to protect the collateral from tax sales.