Expert: Dick Dennis - 5/14/2009

Question
Assume a person has a mortgage balance on a house and pays on time, every time. However that person did not pay the property taxes so the County Tax Collector auctions off the house. The high bidder will pay for the past due property taxes and associated penalties via the bid, but would the high bidder also be responsibly for the balance of the mortgage to the lender?

Answer
Your scenario is not likely to occur, Michael. Why? Because almost every lender (mortgagee) subscribes to a "tax service." That tax service advises the lender that so and so's taxes have not been paid. So, even though that property owner has been up-to-date on his mortgage payments, the lender would pay the taxes and immediately put the property into default,the prelude to foreclosure!! This, of course, forces the property owner to pay the lender back for the taxes if he intends to stay in the house.

However, if we would continue on with your scenario, the sale of the property for the property taxes completely wipes out any and all mortgages, liens or judgements because the property taxes is always the first-in-seniority lien. Always. That's why lenders check with the title company on the status of the property, especially the taxes before they lend a dime.

Let's say that you are a lender. Wouldn't you make sure the payor has been current with the taxes, even if you had to check the records yourself? Of course you would. Now do you see why the scenario you presented most likely would never happen. I do wish you well.

Dick Dennis
dixiedee13@aol.com