hello everyone, I would like to know from any of you investors off there, if I was to buy a tax lien and the owner did not redeem within the three-year. What happens to the owners mortgage amount? Is the owner still liable to pay for that?
It can depend but typically 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.