Bank Owned Foreclosure/Tax Lien

[Kelly Eyler]

I have found a tax lien property that I am interested in purchasing but it says that it is owned/foreclosed by the bank. If I purchase just the tax lien, will I then be responsible for paying the mortgage?

[Ned Carey]

First of all you say you want to buy a tax lien property. Is that what you really mean? I suspect you mean you want to buy the tax lien. A tax lien gives you no ownership in a property only a lien against the property. (A tax deed does give you ownership in a property but you said lien)  If you "Buy" the property itself the tax lien gets paid at settlement.

Presuming you meant buy a tax lien then NO. First of all there is no mortgage. When a bank forecloses on a mortgage the mortgage is gone. The bank owns the property free and clear. 

In the majority of states if you foreclose on a tax lien any mortgage that does exists is wiped out. Most likely if you buy the lien the bank will pay you off and you will get interest but sometimes banks loose track of properties and they drop the ball and lose the property. I just had this happen, the bank had started foreclosure without realizing we already had a foreclose for taxes that was almost complete. Our tax lien foreclosure is final and they are going to pay a hefty premium to get their property back.