Protecting the real estate value up to the outstanding loan balance is the prime consideration, however.General Rule ExceptionsWhile mortgage lenders require landlords to procure hazard insurance equal to the loan balance, there are occasional exceptions.

FMV, outstanding debt and terms, and NOI/cash flow for each property. 

The purpose of those documents is that they establish the terms of the tenancy, that rent is paid, that there are no outstanding claims vs. the prior landlord, etc.

If I was to bid on the house, does the amount I bid automatically get applied to the IRS lien first because it’s the primary lien, or would I be applying those funds to the outstanding mortgage, and then be responsible for the full IRS lien?

When you say not contact regarding payoff, I think that means that I can't contact asking THEM to payoff but are you saying can't contact them saying I'll pay off (absorb the delinquent taxes I've paid plus any outstanding from current year) plus offer  to purchase for $300. which around here most would take because they are just letting these remote lands go anyway with access problems, instead of using the $300. to file and foreclose and they get nothing? 

Would the outstanding mortgage be paid off at closing and the seller be left with the difference of $25,000? 

Prior to my foreclosure acquisition, the status was as follows:  a) There was a prior HOA lien on the property for outstanding dues.

Our plan is to take her security deposit to pay for the replacement of the carpeting and to write her an invoice for the remainder of the bill and take her to small claims court if she doesn’t pay the outstanding balance.

Tax deeds are recorded in the county real estate records.With that distinction in mind, I'll try to answer your questions:Properties with outstanding tax liens are sold all the time - the closing attorney pays off the tax liens with the proceeds from the sale just like he or she would pay off an outstanding mortgage or any other lien on the property.If a property is sold at a tax sale, the previous owner can't sell it to someone else without first redeeming the tax deed.  

OUTSTANDING!!!