First Trust Deed Headed towards Tax Lien Auction
I own a first trust deed that I paid very little for-under $15,000. It is a duplex renting out at $800/month and has a zillow value of just under $50,000 in Cleveland, OH. Recently in doing some research, I noticed that the property taxes are not being paid. I contacted the county who told me that it would be eligible for a tax lien auction as early as this July. When I contacted the gentleman who was the previous owner of the note and who is carrying back a second, he informed me not to worry and that if this happens, the purchaser of the tax lien is required to notify the lien holder at which time I would have the option to buy the tax lien from the purchaser for the price they paid plus whatever interest rate that county pays for their tax lien certificates. (Redeem it)
I have a couple of questions related to this. If this happens, do they notify ALL the lien holders of the tax lien sale and do all of the lien holders have a equal opportunity to redeem? In other words, if the second mortgage holder is also notified and he redeems before I have a chance to is the property his free and clear and do I totally lose out?
I realize that I can just pay all or part of the taxes to avoid this going to sale. Recently, this borrower has been a spotty payer because I have since learned that the property has been sold subject to my first lien. Since this was a very low dollar note, I am sure there was no due on sale clause but I can certainly start the foreclosure process because the borrower is behind on payments. I am wondering if in the end it is cheaper and faster to let the note go to tax lien sale and redeem it vs going through the cost and time of the foreclosure process?
Any insight would be appreciated.
Sandy