Paying Delinquent Property Taxes on a Home in Foreclosure by Kelly M. (Robinson) Resnick, Attorney, Bay Area Office
Should a homeowner pay delinquent and/or current property taxes on a home in foreclosure? Well, the best answer to this is–it depends on whether or not you plan on keeping the home.
When property taxes are delinquent, they become a lien on the property. However, this lien legally “follows the land, not the owner.” Therefore, unlike a second mortgage that can sue you personally if the home forecloses and it receives no proceeds from the sale, a property tax lien stays with the home and will be paid off first before even your first mortgage in a foreclosure and/or sale! Therefore, the county gets paid first and the ex-homeowner is no longer responsible as he/she is no longer an owner of the property.
However, if you “save” the home from foreclosure and intend to keep the home for the long run, you must make good on those property taxes in order to keep the home. If you do not pay off your delinquent property taxes, one of two things may happen: (1) your 1st mortgage lender will pay the property taxes in full and require you to repay this amount as part of your monthly payment or (2) the county can foreclose on your home. Remember–you can propose to pay back any property tax arrears over a 3 or 5 year payment plan in a Chapter 13 bankruptcy as well.
If you are a homeowner who is desperately trying to save your home and you are in foreclosure, you need to make wise decisions. Not everyone will be granted a loan modification or short sale. Therefore, any monies you pay towards a home that you are unsure if you will actually own in the near future will be lost. Homeowners need to consider all options, and one important aspect is the ability to have enough savings to transition into new housing if there is not a favorable resolution to the homeowner’s attempts at keeping his or her property.
If you or someone you know is faced with this dilemma, contact our office for a free consultation today so we may help you compile a strategy that ensures your financial success! For a free 1-hour consultation, contact us in the Sacramento area at 916-728-1500, in the Bay area at 510-456-7400, or check us out on the web at www.hlawinc.com.