Tax Lien Certificate Benefit Investors

When a homeowner defaults on his taxes, the government puts a lien on his property.  The lien is then sold at a public tax auction wherein investors from across US can come and bid for it.  The homeowner is given time to pay for his tax debt within the redemption period.  If he fails to do so, the tax lien certificate holder has the option to take legal action for the homeowner to pay.  Unless the homeowner has the money to pay, he is left with no choice but to sell his property.

Having a lien on the property of the homeowner would not keep him from giving ownership or title to investors.  He will keep in mind that it would be difficult to sell his property during this time.  Also, tax lien is senior to all other liens regardless of time and date of recording, even above a mortgage.  Investors would benefit from this because when a property is sold to pay off all liens, the first to be paid is the first lien.  This is good news to investors.

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