Mortgage vs. Free and Clear Tax Sales

[Aaron Millis]

Would it be fair to assume that most properties that go to tax sale are owned free and clear vs having a mortgage? Because I don't see how/why a mortgage lender would allow a property that is delinquent to go to auction when they could just pay the taxes themselves and foreclose on the owner to protect their investment. I guess this is assuming there is an escrow account though, which I also assume most people have rather than paying everything separately. I don't know what a scenario is where the bank is better off letting a property go to auction..

[John Underwood]

Aaron,

No it wouldn't be fair to assume that.

I have gotten many houses that had recorded mortgages and the banks or even Fannie Mae were notified and chose not to redeem the properties. So after the 12 months redemption period ends the county issues me a deed that shows up in my mailbox. That mortgage is wiped out. Then I can ask the bank that had that mortgage for a release. Guess what so far they will do a release just for the asking at no charge to me. If I can then get previous owners to sign a QC deed and remove all clouds from deed and then I can get a Title insurance policy and then I could sell with a General Warranty deed all without having to do an expensive Quiet Title action. This is for SC.

Other states are not as easy as SC.