NPN 1st with unpaid property taxes, how to pay them off

[Josh Thomas]

I'm looking at two non-performing 1st notes with substantial unpaid property taxes that will be sold at tax lien sales in April. What is the procedure to pay the taxes as a new loan to the borrower? Where can I read up on legal requirements (both in Florida and Maryland)? So far the borrower has been unresponsive. Do I need their blessing first? Can anyone recommend an attorney if one is recommended? I plan to begin foreclosure proceedings shortly after these unpaid taxes are handled.

[Mike Hartzog]

This is a common thing that lenders need to do.  Let's simplify it ...

Once you own the loans and have them boarded with a servicer, you simply pay the taxes directly and get a receipt for that payment.  You then provide the receipt for the tax payment to your servicer and the servicer will add it as an advance to the loan account.  This advance accrues interest at the same rate as the principal.  It's essentially part of the loan now.  The same thing can be done in paying off municipal liens, adding force placed insurance, and other actions which are necessary to protect your vested interest.  For example, if the property is vacant, the cost of securing and winterizing can be added to the loan as an advance.  Certain legal expenses can also be treated as an advance.  Your servicer, if they are any good, will be able to tell you what is allowed and what is not allowed.