Fort Wayne Indiana Tax Lien Sale CONFUSION!

[Pete M.]

Good afternoon fellow BP'ers!  I attended a tax lien sale today just to watch how things went.  It was very interesting, however, it left me confused on the tax lien process.  My understanding is that the homeowner has a 1 year redemption period where they have the right to pay their tax bill, along with a fee (around 10% I believe), and everything goes back to normal with them.  If they don't pay during the one year the purchaser of the tax lien can then follow a process to gain title and essentially foreclose on the original owners.

What I saw were properties going for well over the recorded tax delinquency.  For example, there was one that the county said was around $2,000 delinquent.  It sold for around $20,000 in the auction.  So if the one year period goes by and the property isn't redeemed the tax lien purchaser would get the house for $20,000 plus costs to get title and then foreclose.

But what if the original owner pays the back taxes?  Don't they only owe the original $2,000 plus fees?  Let's say that is $2,500 total.  If they pay the $2,500 and bring their taxes back to current what happens to the lien purchaser?  Seems like they have just put their purchase money at an extreme risk unless I am missing something else.

Help set me straight on this please!  I've read through some of these tax lien posts but I haven't found any that address what happens when the purchase price is significantly higher than the debt.  Thoughts??  Am I way off base on this???