Posted on: 30th Dec, 2010 10:16 pm
Mother in law bought a home through owner finance. SHe makes all her house payments to the owner and is current with all payments. She pays her property taxes at the end of each year but ran into some trouble and didnt pay them for a couple of years. She got a property tax loan company to pay off the taxes but they became the 1st lien holder on the property. The owner who sold the house now became the 2nd lien holder. He started a foreclose auction on the property through his lawyer. Can he still do that even though he is still being paid on time??? Anyone ever heard of this happening? I understand his point of view but is he just bluffing and upset because he became the 2nd lien holder?
Welcome Omar,
The second lien holder can foreclose the property in order to recover his dues. However, if he or she does so, he or she will be responsible for paying off the dues of the first mortgage lender. However, if he is being paid on time, then there is no reason why he should foreclose the property. Your mother-in-law should negotiate with the owner and convince him to not foreclose the property. One reason why the owner wants to foreclose the property may be that his loan has become a second priority now.
The second lien holder can foreclose the property in order to recover his dues. However, if he or she does so, he or she will be responsible for paying off the dues of the first mortgage lender. However, if he is being paid on time, then there is no reason why he should foreclose the property. Your mother-in-law should negotiate with the owner and convince him to not foreclose the property. One reason why the owner wants to foreclose the property may be that his loan has become a second priority now.
What a mess. How do you figure that a man who owns a home would want to foreclose on that very home? Is he going to force himself out of ownership? Let's see..he owns it, yet he has a lien against the property - how in the world does that make sense?
Taxes take priority over everything - that much makes sense, but I am awfully skeptical about all the rest of it.
A trustworthy and knowledgeable real estate lawyer needs to step into this.
Taxes take priority over everything - that much makes sense, but I am awfully skeptical about all the rest of it.
A trustworthy and knowledgeable real estate lawyer needs to step into this.
George, I think youre trying to make a mess out of a mole hill. Very straight forward from what Omar sayseller sold home and took back a first mortgage which undoubtedly has a clause requiring the borrower to pay real estate taxes. New owner defaulted and so seller/lender is perfectly right to initiate foreclosure. For the taxes to become a prior lien, there probably wasnœproperty tax LOANwhich would have been in a junior position. Suspect someone purchased the tax lien and hence the priority status. Even if the first lien/second lien is not an issue, the mother in law breached, i.e. defaulted, on the seller financing and former seller is entitled to foreclose. This went on FOR A COUPLE YEARS and appears daughter-in-law is looking for sympathy!