Welcome to Mortgage Foreclosure Guide
New York Mortgage Foreclosure Process Article
. For a permanent link to this article, or to bookmark it for further reading, click here.
Extinguish Tax Lien for a Foreclosure on a First Mortgage
from:A mortgage foreclosure can be a very complicated matter for the lender, the borrower and any other parties that may be involved. In a simple mortgage foreclosure, the other parties involved will be the lender and the borrower. The lender is usually a bank or other financial institution. In some situations, there may be a tax lien on the property. The tax lien may be from the IRS for money owed the government, a state tax lien for fines and fees owed or a county lien for delinquent property taxes. In situations like this, the question regarding the ability to extinguish a tax lien by foreclosure on a first mortgage has always risen.
In certain states the law varies regarding the right to extinguish tax liens with foreclosure on a first mortgage. These laws may be affected by the type of foreclosure sale it is. It is also depends on the type of tax lien that’s on the property. There are certain circumstances where the lender can extinguish tax liens with foreclosures on a first mortgage. This is particularly true with tax liens from the county or state. Liens by the Internal Revenue Service may or may not be extinguished depending on certain situations, mostly what type of notice they are given regarding the impending foreclosure.
In most states, a mortgage is a lien that takes precedence over any other liens that may be put on the place. But, this does not mean that it can extinguish tax liens. Foreclosures of first mortgage must take place in a legal manner, by proper notification to the other lien holders. Banks cannot automatically extinguish tax lien with foreclosure of first mortgage if there are ad valorem liens, federal tax liens or Uniform Commercial Code financial statements against the property. For instance, in the state of Alabama, the IRS requires at least 25 days notice of a mortgage foreclosure if they have a lien on the property.
In this case of the tax liens being extinguished, the IRS continues to have the right to redeem the property within 120 days of the sale date if the bank extinguished the tax liens. They also can maintain their tax liens on any excess of the proceeds after the bank gets what’s owed to them.
There have been cases that have been taken into court to battle the question of extinguished tax lien with foreclosure first mortgage sales. This often also happens in the case of delinquent property taxes where parcels of land are sold at bid, yet the lender still holds the title to the property. Always check your state laws to be sure of the laws regarding mortgage foreclosures and junior liens.
New York Mortgage Foreclosure Process Specific links
New York Mortgage Foreclosure Process News
Californian couple's struggle against foreclosure ends in tragedy
Oriane Rousseau is suing Wells Fargo over bureaucratic errors that led to foreclosure and her husband’s suicide, writesPAUL HARRISin New York
Read more...U.S. Q1 delinquency rate lowest since 2008: MBA
NEW YORK (Reuters) - The delinquency rate on U.S. home mortgages fell in the first quarter to the lowest since 2008, though the share of homes in the foreclosure process inched higher, an industry group said on Wednesday. The seasonally adjusted delinquency rate on all loans fell to 7.40 percent from 7.58 percent in the fourth quarter of 2011, and was down from 8.32 percent a year earlier ...
Read more...Florida foreclosure case could slam banks
NEW YORK (Reuters) - The Florida Supreme Court is set to hear oral arguments Thursday in a lawsuit that could undo hundreds of thousands of foreclosures and open up banks to severe financial liabilities in the state where they face the bulk of their foreclosure-fraud litigation. The court is deciding whether banks who used fraudulent documents to file foreclosure lawsuits can dismiss the cases ...
Read more...Mortgage Delinquencies Drop to Four-Year Low
NEW YORK (CNNMoney) -- The percentage of borrowers who have dropped behind on their mortgage payments fell to a four-year low in the first three months of 2012, a bankers' group said Wednesday.
Read more...Mortgage delinquencies drop to 4-year low
The percentage of borrowers who have dropped behind on their mortgage payments fell to a four-year low in the first three months of 2012, a bankers' group said Wednesday.
Read more...