Real estate tax liens are the most usual form of tax lien. A significant difference between real estate and personal property tax liens is that a tax lien placed against a piece of real estate will remain with the property. This means that if you purchase a house which has been attached, you will be held responsible for the tax lien if it is not detected prior to closing.

The real property owner and mortgage lender will be served with a notice if taxes become delinquent on the property. A title search is invaluable if you are thinking of purchasing a piece of real estate. The existence of any tax liens will show up on a title search, thereby alerting you to the fact that there are unpaid taxes due.

When a property is sold which has outstanding taxes due, any lien against the property will normally be paid from the proceeds of the sale as a portion of the closing costs. If a tax lien is not detected prior to the sale, the delinquent tax will pass to the new owner.

Sometimes mortgage holders will pay the late taxes when they receive the notice of taxes due and then will invoice the home owner for the amount paid. Mortgage holders will do this to protect their interests because a governmental tax lien outweighs the mortgage payment due to the mortgage holder.

In the event this doesn’t happen, there are several different ways to make overdue tax payments in order to remove the lien from the property. The home owner can decide to pay the tax directly. Alternately, the home owner can decide to use an escrow account.

Home owners typically have a period of time within which to come up with the money to pay the overdue taxes. In the event the taxes are not paid as required, the real or personal property can be seized, auctioned off, and the sale proceeds used to bring the taxes current.

Income tax and gift tax are examples of two types of tax which might cause a tax lien if not paid. For these types of taxes, federal law will apply. Adversely, state tax liens will be governed by that state’s laws. In order not to land in the middle of this kind of situation, it is best to pay any tax when it comes due. Additionally, it is wise to order a title search for any piece of property you are thinking of purchasing.

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With the ongoing economic downturn, more and more homes and properties face foreclosure over the past year or two than ever before. Besides the poor economy overall, the biggest factor is the sub-prime lending spree of the past few years that created ballooning payments and allowed people to enter into mortgages that they couldn’t manage and shouldn’t have been given.

When a home is foreclosed on, it means that the bank or lender has obtained a court order terminating the loan agreement and can take possession of the property back from the signer. This would be the bank that underwrote the original loan or mortgage agreement.

When someone takes a mortgage or home loan, the lender obtains a security interest from the borrower who mortgages or pledges an asset like a house to secure the loan. If the borrower defaults on payment, the lender or mortgage holder can try to repossess the property. This is a foreclosure.

While the main reason for foreclosure is failure to pay the mortgage note or loan, it isn’t the only reason. Property tax that hasn’t been paid, overdue HOA dues or assessments, even unpaid contractor bills are all problems than can lead to a foreclosure action.

The foreclosure process as it relates to a residential mortgage loan happens when the bank or other secured creditor takes possession of the property after the owner has failed to comply with the mortgage agreement. Most commonly, this is happens as a failure to meet payment of the home loan.

Once foreclosure begins, the lender will usually try to recover their principle and legal costs by selling the property. This is what foreclosing on the mortgage or loan actually is. Depending on the state, the homeowner may have a grace period to reclaim their property, however it’s obviously much more desirable not to go into foreclosure to begin with.