Interesting article:http://www.cnbc.com/id/34877347I can't remember who but somebody at BiggerPockets called this in a thread about 2nd lien holders requiring outside closing payoffs.

When the tax lien foreclosure is happening, what options do 1st and 2nd lien holders have to protect their interests?

The seller is the owner of the house we've been renting for 2 years.My question is what protections should I be thinking about to make sure the first lien holder is being paid.

Update:The property had 14k of outstanding taxes and liens 11.5k of it was a tax lien that was sold (accumulated fees, lawyer costs and the lien itself).I negotiated with the tax lien holder to take 2k instead of the 11.5k.

Indymac is the holder of the loan, and I started doing impounds last year to spread out the taxes.

A friend of mine knows of this property-not yet in foreclosure, as he contacted the mort. holder, he contacted the owner-she wanted alot before it went to F, now she moved out-lives in another state.

It does not convey that the holder actually knows what they are doing.

In determining which way is the best for the lender/holder/servicer, subsidies by the government for losses can not be used in that determination.

The property has went to foreclosure already and the 1st lien holder purchased the property at the courthouse steps.

If it is a note serviced, but not owned by the bank, they will still like to see it go because in the event of default the holder may require the originator to repurchase the loan.