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Posted by Tom G on July 24, 2006, 1:19 pm
>
>>How is it that property owners can get away
>>with this for so many years?
> As the other posters have said, somebody is paying those taxes and now
> holds a lien on that property. After a number of years they can
> forclose.
> The procedure in Florida is the municipality does a reverse auction on
> the bill, bidding down the interest rate to the lowest rate the
> prospective lender will accept and the lender pays the tax bill. The
> tax and interest continues to accrew on the lien until the lender can
> take legal action (something liker 5 years). They they get title to
> the property but that will come with all the other baggage so the
> mortgage lenders, code enforcement or any other lien holders will also
> have skin in the game. You have to be very selective when you buy
> these tax certificates or you may end up losing money. The owner may
> actually have more debt on the property than the property is worth.
> Usually you can go on the county court clerk web site to see who else
> has a lien before you jump in.
As I understand it, in Illinois, foreclosing on a tax lien would wipe out
the mortgages and other liens, therefore a mortgage company would jump in
and pay that tax lien before the place was sold for taxes and either add it
to the mortgage or foreclose on the mortgage as paying your taxes is usually
necessary to maintain the terms of the mortgage. As you said he may have
so much debt on the property that one way to come out with anything at
foreclosure is to have pocketed some of the money rather than paying those
debts. Or the property may be in an area that is so bad that no one wants
to own it and therefore hasn't been buying those tax debts. The city may
not even want it.
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