What Happens If You Are Awarded The Property And There's An Unpaid Mortgage?

Hi fellow investors. I just recently found this site, and have enjoyed it a lot so far.

I just finished reading Tax Liens and Foreclosure Deeds by Don Sausa, and am really excited to get started in investing! I have a burning question that the book just didn't answer.

After the redemption period ends, what happens if you are awarded the property and there's an unpaid mortgage owed to the bank? Who is responsible for paying it? Also, what about other money owed on the property (other taxes, etc)? Does the existing mortgage and all other money owed on the property get transferred to the lien holder in addition to the property itself?

If so, it seems it must be crucial to make sure to bid only on properties that are fully paid off, or at least ones that you know you can flip quickly in the event that you might actually be awarded with the deed.

Thanks for any Advice!
J. Hobbs

Jhobbs
I believe that I and others have covered this in earlier post. I think on this site. You might want to search the archives. Also check magic bullets forum for additional info. Look at BillH post there

But a quick recap here. In Missouri you must, by certified mail, notify ALL lien holders, mortgagors, or any one else with an interest in the property before you are awarded the property. The collector will also have you sign an affidavit stating you have done this. If the people you notify do not respond, then the monies that were due are wiped out, they are no longer due. Except IRS lens. There’s something special about them. Remember, this might be state specific to some degree. Check your state.

+1. Every state is different. In Georgia for example, the mortgage evaporates. Only IRS leins survive, then go into a 90 day redemption. Within the 90 days the IRS can take the property or drop the lein, which is what I hear they typically do unless its a large amount.

Thanks for the insightful replies. Does anybody know where I would go about finding this information out for the state of Florida? I've tried a google search without much luck.

Sincerely,
JHobbs

I have bought several FL tax deed props. There is no redemtion period and and other liens are wiped except IRS has 120days to overturn the sale. Here is the FL statutes. http://www.leg.state.fl.us/Statutes/index.cfm?App_mode=Display_Statute&Search_String=&URL=Ch0197/SEC552.HTM&Title=->2006->Ch0197->Section%20552#0197.552

The tax lien and tax deed (depends on the county) sales are held by the county tax collector. Many sales are now held on line. So check the county website and look for the tax collector, you should get your answer that way. I know that Dade county does their sales on line and gives info that way too.
Good Luck

you have to be aware of any senior liens to the tax lien. so if there is an IRS lien or a mechanics lien, those have to be cleaned up.

cjmazur.

Are mechanics' liens superior to tax liens in all states?