Tax Foreclosure and Mortgage Foreclosure Differences

By dhinternational  /  January 18, 2013 / Comments Off on Tax Foreclosure and Mortgage Foreclosure Differences

Tax Foreclosure and Mortgage Foreclosure DifferencesThe process of tax foreclosure is quite similar to mortgage foreclosure but the thing is they are really different to each other.  Homeowners and real estate investors must be aware of this.  In a tax foreclosure scenario, the bidder only pays for the homeowner’s delinquent property taxes so that he can take control of it.  While in a mortgage foreclosure, the decision may be final for the new owners to evict the former ones as fast as the local laws allow.

A homeowner must keep in mind that an unpaid tax bill turns into a lien against his property.  In many US states, tax liens are given first priority ahead of any other form of liens, which include mortgage lien.  That is why it is very important for the homeowner to settle delinquent property taxes in order to avoid foreclosure problems.

Another difference of tax foreclosure to a mortgage foreclosure is in defending it.  Mortgage foreclosure involves dispute between the homeowner and the lender.  Defending the issues in a mortgage foreclosure are to be resolved oftentimes outside of court.  As for tax foreclosure, it involves issues between the homeowner and the local county.  Disputes in tax foreclosures are settled in court, which costs a lot in lawyer’s fees.

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