Tax sale proceeds: Who gets what?

[Mike Kim]

Hi guys,

Nice to meet you, all. I am new to this and I saw some of your comments on the Tax lien sale. Perhaps you can give me some advice:

If the tax lien is $10K, and there is a mechanic's lien for $100K, and the mortgage is for $100K, and the tax deed is sold for $300K on a $400K house at a tax deed sale, who gets paid for what amount?

a) County Treasurer takes $10K and pays the mechanic $100K, the mortgage holder $100K, and the remaining $90K to the home owner?

b) County Treasurer takes the entire $300K bid, cancels both the lien and mortgage, and the owner gets nothing?

c) County Treasurer takes $10K, cancels both the lien and mortgage, and the home owner gets the remaining $290K?

Your insight would be greatly appreciated. Thank you!

Mike

[Wayne Brooks]

The answer is A.  But, the lien holders and owner have to apply for the funds from the court registry, the tax collector doesn't just send out checks. They get in order of; 1st mtg holder, then junior liens in their order of priority, and if money is left over it goes to the owner.