Tax Foreclosures: They are the masters- By: John Smith
If there is someone who can be taken as the supreme authority then it will be the government. The government places different types of taxes and the government can place which will be depending on the state the house is in. for example property tax has to be paid by all the owners; however, there are certain states where you are also required to take insurances like flood, hazard and earthquake which are mandatory by the government. If the borrower fails to do so the property gets listed as Tax Foreclosures.
The time that the government might take before placing a foreclosure is state based and has nothing to do with the borrower; some state might give you a leverage of a year, the other might allow you to default for 5 years. The Tax Foreclosures supersedes any other type of foreclosures, for example if the borrower has not paid his mortgage payment from some time and has also defaulted on the taxes, although the amount that he is supposed to pay the bank is a lot more than to be paid to the government, the property will still go to the government. This is the main reason why the banks will offer you and ask for your permission to pay for taxes on their own, which they will be adding in your monthly payments.
In case you decide to take care of the taxes on your own you will be required to show a proof to the bank that you have paid and in case you fail to do so they will pay it from their side even with out your permission as unless you have paid your last bank installment the bank also has a monetary interest in the property. These taxes go on annual basis and it is not possible for all to take out that amount in one go, therefore there are some people who allow the bank to take care of the same so that they can pay on monthly basis and even get spared from the hassle.
There are a lot of real estate agents who wait for the properties to get listed as Tax Foreclosures, since they get an opportunity to buy them at a low cost. Like the banks the government doesn’t want to keep the possession of these properties for a long time. The main reason is that the longer they have the property; they will have to spend money to keep it which is nothing but a loss of manpower for them.
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