Question About Right of Redemption in PA

[Jennifer T.]

In PA, mortgagees (lenders/banks) can also redeem tax delinquent properties with same redemption period as the owner. My question is, why arent they always redeeming delinquent properties (assuming most houses do have a mortgage on it) by paying a bit of tax on it? It seems like a great deal for banks just pay a few thousands in owed taxes and get a house! 

So, how does any house make it to auctions, or am I not getting something right? 

[Ned Carey]

@Jennifer T. If the bank “redeems” the tax lien. The property owner still owns the property. most mortgage documents would say that the property owner needs to reimburse the bank for the taxes the bank paid.

Now, why doesn’t the bank pay the taxes so it does not go into tax sale? Normally they do. That is why banks escrow tax and insurance payments. 

However if an owner is in default on their loan, the bank hasn’t been collecting tax payments. Also some banks don’t escrow money for taxes and insurance. Why they don’t I don’t know. 

Also if the is no loan on the property the there is no lender to come in and save the property. 

There can be many reasons a lender doesn’t step in. Sometimes they are just asleep at the wheel.