HOW IT WORKS
HOW TAX DEED FORECLOSURE WORKS
Property owners must pay annual property taxes. If taxes go unpaid:
01
TAX CERTIFICATE SALE
The county sells a tax certificate to an investor who pays the unpaid taxes on the owner’s behalf.
02
TAX DEED APPLICATION
If the taxes remain unpaid for a certain period (usually 2 years), the certificate holder can apply for a tax deed sale.
03
PUBLIC AUCTION
The property is auctioned to the highest bidder at a public sale.
04
SURPLUS FUNDS CREATED
If the property sells for more than:
- The unpaid taxes
- Interest and penalties
- Administrative costs
HOW A MORTAGE FORECLOSURE WORKS
Property owners who have a mortgage, must pay it. If it is not paid then:
01
PAYMENT DEFAULT
The process often begins when a borrower misses a payment (90 days +)
02
LEGAL ACTION
The lender files a foreclosure lawsuit with the Court (Judicial) or a Notice of Default (non-Judicial)
03
FORECLOSURE AUCTION & SALE
A public auction is sold at a public auction to the highest bidder.
04
SURPLUS FUNDS
If the property was sold for more than what was owed, then there is a Surplus that belongs to the owner or their heirs
HOW A HOMEOWNER ASSOCIATION (HOA) FORECLOSURE WORKS
Property owners must pay their HOA fees and assessments. If not paid then:
01
DELINQUENCY NOTICE & RECORD A CLAIM OF LIEN
The HOA send formal notice of overdue balance. If not paid, then HOA files a claim of lien against the property
02
LEGAL ACTION
The HOA files a foreclosure lawsuit and records a Lis Pendens and obtains a court judgment.
03
FORECLOSURE AUCTION & SALE
A public auction is sold at a public auction to the highest bidder.
04
SURPLUS FUNDS
If the property was sold for more than what was owed, and there are no other debts or liens, then a Surplus is created. This Surplus belongs to the owner or their heirs
