Tax Liens in Maryland.

[Chinmay J.]

A group of investors that I am associated with is considering investing in Maryland Tax Liens.   I know the basics of tax lien investments, but wanted to gain some insight in two things:

a)  What is the qualification  process one has to go through beforehand to ascertain whether a particular tax lien is a potential good investment or not.  My understanding is that a tax lien will wipe out majority of junior liens, except for say IRS debt. 

At one point when I inquired about this, I was informed that a basic title search is necessary on the property to see how cloudy the title is for the investment - especially when it comes to chain of ownership, and whether the potential investment would qualify for getting Title Insurance. 

Who are the players in Maryland who can help out with this.. Are there title companies or real estate attorneys who specialize/ assist with this. 

b)  How complicated is the foreclosure aspect in Maryland if the taxpayer doesn't pay during the redemption period. How do bankruptcy laws interfere with one's ability to foreclose on the property? My understanding is that it can severely delay the process.  Who are the players in Maryland who have experience with helping investors with this kind of issues. 

Any thoughts from the experts who might have knowledge of this topic.  @Ned Carey @Russell Brazil

[Ned Carey]

@Chinmay J. 

Almost any property can be a good investment depending on how other people bid. The most important thing to remember is the property is security for your investment. Its true as is value needs to be more than the lien pluss the additional costs to take title.

Yes in  MD a property tax lien foreclosure wipes out all debts against the property. The only thing that would survive is federal liens. There is a process to deal with IRS liens. 

It always surprises me when I see someone say you need to do a title search. The tax lien clears the title. No need to search in advance in MD. That is done during the foreclosure. 

There are many attorneys who specialize in this. You must you an attorney that specializes in MD tax sale. The courts are very picky and if you don't have someone with experience it will cost you time. Whether you can get title insurance depends on the quality of work the attorney does. that is another reason you need one that specializes. 

If you want to know who the players are go to BidBaltimore.com and look at prior years results. I guess it depends on how you define players. There are a number of investors here on BP that at least dabble in MD tax sales. There are at least a couple who know it very well. 

For you not at all, for your attorney it is very complicated. 

Bankruptcy stops your foreclosure dead in its tracks. You can only proceed when the BK is dismissed. Sometimes the court will put the property owner on a payment plan. Most of the time is just stalls things 1-2 years. That adds 1-2 years of additional costs to you if you do eventually foreclose.