Hello all,
I've been getting a lot of clients who are not only behind in their mortgage payments but also their taxes. If you have a mortgage on your home and owe back taxes, there are some options that I am finding most consumers are unaware of or just don't think about.
Of course I would like to encourage you to deal with these issues on your own as soon as possible but the risk is simply too high to chance if you know you simply don't have the money to catch things up.
Normally, when a homeowners taxes are sold, the owner is given a redemption period. This means you are given a certain period of time to pay the sold taxes before the person or organization who paid them can take over the property. Many homeowners are misinformed and just ignore it because they have a mortgage and assume the house cannot be taken from them if they also carry an outstanding mortgage. That can't be further from the truth. If you want to "Redeem" your taxes, you'll need to contact your state tax collector and request a redemption letter if you've not received one. Be mindful fees are constantly going up and the remaining taxes, interest and fees are added to that total, so don't assume you know how much you owe. You need a current Redemption Letter. Also if someone has purchased your taxes, they must continue to pay the taxes going forward until your redemption period is over or they will not be able to claim the property. I've seen too many people who lost their property due to this situation. So what should you do if you just don't have the money?
Contact your mortgage provider immediately. Because they have an interest in the property (the mortgage note they hold), they'll want to see that your taxes are paid. Many of them have an internal procedure to check this on their own but you should leave nothing to chance. If they catch it, they will normally start an escrow account for you and pay it or if you ask them to start an escrow account and pay your back taxes they will, regardless if you are behind in your mortgage payments or not.
This will cause your regular mortgage payments to go up but realistically, if you can't afford the monthly increase and are behind on your taxes, it's highly likely that it's time to reconsider if this homes expenses are affordable. Having the mortgage company pay your taxes will at lease secure your interest and perhaps keep you from having something more drastic happen like receiving an eviction notice with the name of your homes new owner on it.
