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Lane
Lane, JD, CFP, MBA, CRPS
Category: Finance
Satisfied Customers: 10163
Experience:  Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986
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We are currently buying an owner financed property. they

Customer Question

we are currently buying an owner financed property. they have obtained an attorney and are accelerating the maturity of the note based on late payments, late fees and stating that creating a tax lien on the property puts us into default. If the full amount is not paid in a timely manner, they will proceed with foreclosure. We have put the home on the market in order to get the funds to pay the balance. Is there anyway to delay or get an extension of time before they actually file which is on or around June 7th 2016?
Submitted: 6 months ago.
Category: Finance
Expert:  Lane replied 6 months ago.

Hi,

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Can you tell me more about who the parties are... When you say "they" Is this the property tax authority?

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Only taxing authorities can create "tax" liens

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Let me know and we can go from there

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IN some states, PA for example, foreclosures are judicial which means the lender files a lawsuit in state court in order to foreclose the house. As part of the process, the court will enter a final judgment and then the home will be sold at a foreclosure sale.

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The homeowners could potentially redeem the home, so long as they do it before the sale takes place. They would have to pay off the full amount of the unpaid mortgage debt, including costs and fees. However, once the sale takes place, the homeowners lose the chance to redeem.

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Let me know your state and we can go from there

Customer: replied 6 months ago.
The estate (their children) of the person(s) we purchased the property from in 2009 have obtained an attorney. The attorney sent the notice of default. A couple years ago we obtained a loan to pay our taxes, I'm assuming this is the tax lien they are speaking about. We are in Texas.
Expert:  Lane replied 6 months ago.

This COULD be a scare tactic ... you should check to see if there really IS a tax lien.

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If so, if you can pay the tax, you can make this go away

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Sec. 32.01. of TX code - TAX LIEN. (a) On January 1 of each year, a tax lien attaches to property to secure the payment of all taxes, penalties, and interest ultimately imposed for the year on the property, whether or not the taxes are imposed in the year the lien attaches. The lien exists in favor of each taxing unit having power to tax the property.

Expert:  Lane replied 6 months ago.

You can go here to see if there is a lien: https://www.courthousedirect.com/AdverseLienSearch.aspx

Expert:  Lane replied 6 months ago.

And in terms of redemption ... TX is a little more lax than PA

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In Texas, you can pay off the overdue amounts to “redeem” the home before the sale takes place. This will release the tax lien that exists on the home and stop the foreclosure (Tex. Tax Code § 33.53).

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More important...

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In Texas, there is a two-year redemption period for residential homestead properties and agricultural properties. Other types of properties have a 180-day (six-month) redemption period (Tex. Tax Code § 34.21).

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The post-sale redemption period starts when the deed is filed in the county records (Tex. Tax Code § 34.21).

Expert:  Lane replied 6 months ago.

Does that help?

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