Posted by JohnBoy on March 24, 2001 at 19:00:20:
My understanding is that the lender holding the mortgage on the property MUST be properly notified about the taxes owed before they can just get the tax deed. Once the lender is notified, which I’m sure they have been already, they will end up paying off the tax bill to protect their interest in the property. They will add all that cost and expense involved onto what the property owner owes on the mortgage.
Sometimes, even though the lender has been properly notified they may screw up and let this slip through the cracks where they lose their position as a secured creditor against the property. My understanding is this sometimes happens when a mortgage has been sold and transfered to another lender. Everything gets shuffled around in the paper work process and somehow the taxes don’t get paid causing the lender to lose their position and have their lien wiped out! It does happen, but for the most part they will end up paying the tax bill to protect their position.