How To Keep Properties That Have Tax Liens Placed On Them
Jack Preston | July 24, 2010Tax liens are placed upon properties when the owners have failed to pay certain taxes for a certain period of time and have failed to respond to the government’s attempts to retrieve that payment. By placing tax liens on these homes the government ensures that the owner can’t really make a move without first making a payment.
When tax liens are placed upon properties they tend to create a very negative financial situation for the owners. This is because tax lines are reported to the credit bureaus making it hard for the owners to build their credit or get financing. These tax liens also make it impossible to transfer the title of the property or to offer it up as collateral to finance anything else.
One of the most common ways that people pay off their tax lines when their property is already mortgaged is by the lender paying the upfront costs and creating a repayment plan with the owner through that is attached to their mortgage payments through an escrow account. Mortgage lenders do this to avoid the risk of the government selling off the property and the lenders then being unable to recoup the money they lent out for purchasing it.
For those owners who are not interested in dealing with an escrow account or don’t even have a mortgage on the property there is another option. If they simply are interested in getting rid of the property they can sell it. Transferring the title cannot be done without the payment of the tax liens, but these costs can be included in the closing costs of the buyer’s mortgage.
The final way to pay of tax liens is when the government seizes the property. It is then offered up at tax deed auctions or sold to investors as a tax lien certificate. Tax deeds have lower risks as the title transfer is guaranteed whereas with tax lien certificates don’t necessarily equal the right to gain the property as their own.
These three options are available to owners in order to handle the situation of tax liens being placed upon their properties. Each one is easy, in its own right, to deal with. Owners can either put a little bit of effort in that will go along way or simple ignore the tax liens and let the government tax the tax liens away.
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