Tax sale and Treasurer's deed?? Colorado
I'm studying for my Broker's license and I came across something very interesting. Apparently, if someone is delinquent on their taxes, the property goes to a Tax Sale where the highest bidder (above taxes owed) gets a Purchase Certificate. Then if they pay taxes on the property for 3 years they can take ownership of the property with a Treasurer's Deed. This is all dependent on the current owner never bringing the taxes current during that three year period. My question however, is how can a property owner become delinquent on the property taxes? I thought the priority of mortgage payment was: escrow (for taxes and insurance), interest, default interest, then principal. If this is the case, then the only way to be delinquent on taxes is if you're in default on the mortgage and then the foreclosure process will be much faster than 3 years.
Can anyone explain this to me? Seems like it could be a neat (albeit risky) investment strategy.