The Stop Foreclosure Institute recently received a question from a homeowner facing foreclosure. I'll call him Peter to protect his identity.
(Foreclosure is embarrassing and I don't want to put his name out there.) Peter asked, "I am six months behind on my mortgage payments. I just got the tax bill for 2010 in the mail. Should I pay it?"
He continued, "What will happen if I don't pay it? Will my house be auctioned to pay the taxes?"
Discover how other sellers successfully did a short sale and request a free consultation by clicking here.
Here is the answer to Peter's Question. It all depends on what his plans are and how tight he is on money.
Most people in Peter situation fall into one of 3 categories.
Category A. They want to keep their home. They are already working on a loan modification with their lender. They are saving every extra penny possible and maybe even working an extra job.
Category B. They don't want to keep their home. They might be thinking about a short sale or deed-in-lieu of foreclosure.
Category C. Cannot afford to keep their home, but want to stay there as long as possible. Maybe they bought an expensive home and aren't making the big bucks anymore. But, they can afford to rent a smaller, less expensive home.
First a little background on Peter. Peter is in Florida. In Florida, the county cannot auction your home to pay the taxes for at least 2 years. But, usually it is 5-7 years before that actually happens.
This means you have a long window to pay back that tax bill. here is the other thing that often happens. Your lender pays the tax bill. I'm sure you're asking, "Why would the lender pay the tax bill?"
To protect their interest. If the house gets sold at auction, the lender's first mortgage could be wiped out. Lender's have whole departments that do nothing but track property taxes that are due and pay them if necessary. They will pay back taxes and tack it onto what you owe them.
Here is one other caveat: The interest rate on delinquent property taxes in Florida is 10-18%. That can rack up pretty fast.
Here are my answers for how Peter should handle this tax bill.
If he falls into Category A: Pay the tax bill as soon as possible AFTER your loan mod is approved. However, Peter should first attempt to negotiate a successful loan modification with his lender.
Most lenders want a "good faith down payment" to modify a loan. So until the modification goes thru, Peter save all his money for that.
Because if the loan modification is not approved, then Peter will have wasted money paying the taxes. It will be just one less payment for the bank after they foreclose.
If he falls into Categories B or C: Do not pay the tax bill. The lender will end up paying the bill after they foreclose. Or, it will be paid as part of a short sale. Peter will have sold the house, or his lender will have foreclosed on it long before it can be auctioned for unpaid taxes.
Thinking about a short sale? I can help you short sale your property and never pay the bank another penny. Send me an e-mail at bion@bionsellshomes.com. I will contact you for a free consultation.
When we talk, I will explain how the process works in detail. If you prefer, then you can call me at 770-875-4268.
Discover how other sellers successfully completed a short sale and request a free consultation by clicking here.
Thinking about a loan modification? Our Powder Springs Loan Modification Kit has the instructions you will need to get a loan modification approved with your lender. Click here to request a copy.
Thanks for reading this, Bion Grady.
Bion is a Real Estate Agent at Maximum One Realty Greater Atlanta.
Phone: 770-875-4268. bion@bionsellshomes.com.
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Bion Grady specializes in loan modification assistance and short sales in Powder Springs Georgia. Powder Springs Loan Modification Help, Powder Springs Short Sales. Powder Springs Short Sale Realtor Short Sale Realtor. Powder Springs GA Short Sales. Powder Springs Realtor.
Copyright 2010 SFI Marketing Institute, LLC. All Rights Reserved. This is not intended as legal, technical, or tax advice. Please speak with a licensed professional before making any decision. Information is deemed reliable but not guaranteed as of the date of writing. The views expressed here are Bion Grady's personal views and do not reflect the views of Maximum One Realty Greater Atlanta. This information on Powder Springs Short Sales: We answer a question from a homeowner facing foreclosure is provided as a courtesy to our viewers to help them make informed decisions.
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