Tax Foreclosure Question / GA

[frogger]

I have received the letters regarding property taxes that haven't paid yet that state if not paid in full by June 22, 2009, the collection agency is going to assist the tax commissioner in tax foreclosure proceedings on my property.

I don't have the money or the desire to pay these, and am about 3 - 4 months away from being ready to file, so what are the upsides and downsides to this situation.

Money is owed to the bank on these properties, so how is the bank going to react and what will they do?

Thanks in advance.

[lrprn]

A question first....do you plan to keep the house when you file?

[frogger]

A question first....do you plan to keep the house when you file?

No. I have not paid the property taxes on most of my rental properties. I do not intend to keep. I have no desire to keep. I just need to keep things flexible with my banks until I can file bk, which is going to be around September of this year. Still on relatively good terms with the banks, just trying to keep the wolves at bay. To pay the property taxes would be about $60K that I do not have. I'm good on the insurance, which is a big issue, I just don't know how much they may pinch me over the taxes.

Thanks for your help.

[eddiep]

I believe in most cases the bank will step in and pay the taxes to protect their investment and would add that to the principle balance.

[justbroke]

In most cases, a smart and alert Bank will step in and pay the taxes (because they don't want to lose money!). Sometimes, the Banks either don't receive the notices or somehow just miss it.

Generally though, the Bank that holds the mortgage will pay the property taxes before it goes to an actual tax deed sale. A Bank stands to lose money if they let it go to tax foreclosure.

[frogger]

In most cases, a smart and alert Bank will step in and pay the taxes (because they don't want to lose money!).

Generally though, the Bank that holds the mortgage will pay the property taxes before it goes to an actual tax deed sale.

I received a call from one of the banks in a panic frenzy. Wanting to know what I was going to do about the taxes, they had to be paid, could I borrow the money from family or friends, what was I going to do????????

Told him that I was going to use the money for the next 12 months before the redemption period was up. The redemption fee is 20%, that's cheaper than a credit card for the ability to use that money for other things.

He informed me that the bank would not allow the taxes to be sold, that they would pay them before this happened, and then consider me to be in default on the note and would start foreclosure.

I believe my last words to him were "Welcome to Landlording". This is going to get interesting.

[justbroke]

Yes, the Bank has the right to protect their security interest and will pay the Taxes. Usually, though, they don't find you in Breach or Default. What they do is create an escrow account and add it to the escrow balance, then jack up your monthly payment to cover!