Dallas-Fort Worth Real Estate Investor Club

Tax deeds

  • 24 Dec 2017 8:24 AM
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    Message # 5647460
    Deleted user

    So, when buying property tax foreclosures on the Courthouse steps what happens to funds paid that are in excess of the amount owed to foreclosing entity (i.e the city)? I think they go back to the owner of the property. But, if there is a note on the property then does the lender get those funds?

    I am confused about this because I know the tax deed voids all Deed's of Trust. So, the lender is compelled to bid against the public on the property if they want to preserve the collateral of their promissory note. But, I can't believe that the system would deliver excess funds to the defunct owner of the property and allow them to not pay the lender's note.

    I am a rookie obviously.

    Can someone clarify this for me? Thanks
  • 25 Dec 2017 11:14 PM
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    Reply # 5648482 on 5647460
    Neil Aggarwal

    I have sent a property to auction as a foreclosure of my lien.  It was bid up past the amount I was due.  The excess went to my borrower.

    In any scenario where a superior lien is foreclosed, all inferior liens are wiped out.  So, if the foreclosure is being done for a tax lien, that takes priority to the mortgage lien.  To me, that means the lender's lien is wiped out and it has no bearing on anything. That is why I escrow money to pay the taxes.  I want to make sure they are paid and not risk having a problem.

      Neil Aggarwal
      NSA Partners, Ltd.

    Last modified: 25 Dec 2017 11:21 PM | Neil Aggarwal
  • 27 Dec 2017 9:12 AM
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    Reply # 5649475 on 5647460
    Richard Kellett (Administrator)

    All liens are wiped out in a tax sale, except for government liens(IRS,ect.). Any funds over and above the tax bill may be claimed by the owner. But they have to know there is money available to them. Most don't. After a period of time ( not sure how long) the money becomes property of the county.

    Call me if you wish to talk more.

    Dick Kellett

    817-915-0122
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