Delinquent property taxes
I have a question that I would like to pose to our various short sale experts.
It has to do with delinquent property taxes.
As I am sure those of you who do short sales on a regular basis know - if there are property taxes still owed to the county where the property is located (not a 3rd party tax company that becomes a lien) - we have to show those taxes on our prelim and final HUD that we submit for the short sale. (I know, 3rd party liens need to be shown on the HUD1 also- but I am just talking about delinquent taxes that have not been paid to the county)
And of course they will negatively affect the net dollar amount that is being shown as offered for settlement to the lien holder.
If the taxes end up getting paid (usually by the lien holder) - then they will not need to be shown on HUD anymore.
It was stated in a seminar that I attended by someone who claimed to be a short sale "expert" and a previous negotiator that if the homeowner contacts the lien holder and lets then know that there are delinquent property taxes and that the want the line holder to get them paid up - that the lien holder was required to pay the delinquent taxes.
It can not be a request from the agent or any other authorized 3rd party - but has to be the homeowner.
I have never heard anyone else say this - nor have I heard of it happening.
I wanted to know if anyone has had any experience with this.
I just had a situation happen on a short sale where when we started working on it - there were property taxes still owed for 2008 and 2009. The county actually scheduled a foreclosure date for the unpaid taxes - and so once the lien holder was aware of the posted foreclosure (since tax liens are 1st position liens and will wipe out mortgage liens) - they paid the delinquent taxes.
Now I no longer have to show them on my HUD1 - so my net looks way better even with the exact same offer.
Any comments would be appreciated.
Replies to This Discussion
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Permalink Reply by Kent Dills on
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John, I've NEVER heard of the lender being REQUIRED to pay delinquent property taxes simply because the homeowner ASKS them to. Sounds like a rediculous assertion to me - but I've been wrong before. Let's see what others say or what they've experienced.
As to the lender quickly moving to pay back taxes if a foreclosure sale is scheduled by tax authority, that happens ALL THE TIME. The lender moves to quickly protect their interest in the usually much larger equity left in the property. -
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Permalink Reply by John Edelman on
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Thanks for the reply Kent.
I found what this "expert" said to be fairly hard to believe - but if it is in fact true - that would be a great way to deal with delinquent taxes.
And I have also on several occasions had the lien holder go in and pay delinquent taxes when they felt that their lien position may be jepordized. I was not surprised by this - but it sure is nice when it happens. We don't have to argue with the negotiator over the net due to unpaid taxes and try to explain to them that really (in my opinion) the unpaid taxes should not even be part of the consideration - because the bank is going to have to pay them regardless (even if it goes to foreclosure) - but this can be an uphill battle. It is just so nice when all of a sudden they get paid - it is like they magically disappeared. -
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Permalink Reply by Sam Purtle on
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John
This so called "expert" does not know what he is talking about. It is solely at the lien holders discretion whether or not to pay the delinquent taxes. In all the short sales I have handled (and that is a lot) I rarely run into an issue with the primary lien holder agreeing to pay the taxes owed.
I agree with you that it is always nice to find that during negotiations the lender "magically" pays the taxes and they disappear from the HUD-1.
Happy short selling....
Sam -
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