(Foreclosure is embarrassing and I don’t want to put his name out there.) Peter asked,
“I am six months behind on my mortgage payments. I just got another tax bill notice for 2011 in the mail. Should I pay it?”
He continued, “What will happen if I don’t pay it? Will my house be auctioned to pay the taxes?”
Here is the answer to Peter’s Question. (First, I would assume that Peter doesn’t have a lot of extra money available to pay the property taxes. If he had extra money, he wouldn’t be behind on his mortgage.)
The answer depends on what his plans are and how tight he is on money.
Most people in Peter situation fall into one of 3 categories.
They want to keep their home. They are already working on a loan modification with their lender. They are saving every extra penny possible and maybe even working an extra job.
They don’t want to keep their home. They might be thinking about a short sale or deed-in-lieu of foreclosure.
Cannot afford to keep their home, but want to stay there as long as possible. Maybe they bought an expensive home and aren’t making the big bucks anymore. But, they can afford to rent a smaller, less expensive home.
First a little background on Peter. Peter is in Florida. In Florida, the county cannot auction your home to pay the taxes for at least 2 years. But, usually it is 5-7 years before that actually happens.
This means you have a long window to pay back that tax bill. Here is the other thing that often happens. Your lender pays the tax bill. I’m sure you’re asking, “Why would the lender pay the tax bill?”
To protect their interest. If the house gets sold at auction, the lender’s first mortgage could be wiped out. Lender’s have whole departments that do nothing but track property taxes that are due and pay them if necessary. They will pay back taxes and tack it onto what you owe them.
Here is one other caveat: The interest rate on delinquent property taxes in Florida is 10-18%. That can rack up pretty fast.
Here are my answers for how Peter should handle this tax bill.
If he falls into Category A: Pay the tax bill as soon as possible AFTER your loan mod is approved. However, Peter should first attempt to negotiate a successful loan modification with his lender.
Most lenders want a “good faith down payment” to modify a loan. So until the modification goes thru, Peter save all his money for that.
Because if the loan modification is not approved, then Peter will have wasted money paying the taxes. It will be just one less payment for the bank after they foreclose.
If he falls into Categories B or C: Do not pay the tax bill. The lender will end up paying the bill after they foreclose. Or, it will be paid as part of a short sale. Peter will have sold the house, or his lender will have foreclosed on it long before it can be auctioned for unpaid taxes.
Thinking about a loan modification?Our Florida loan modification guide will show you how to reduce your mortgage payment, keep your home, and get back on your feet. Send me an e-mail at firstname.lastname@example.org to request a Free Copy.
Thinking about a short sale? I can help you short sale your property so you can move on with your life. Send me an e-mail at email@example.com. I will contact you for a free consultation.
When we talk, I will explain how the process works in detail and answer any questions you may have. Or, if you prefer, you can call me at (407) 374-3123
Discover how other sellers successfully completed a short sale and request a free consultation by clicking here.
Thanks for reading this,
Brady is an Orlando Real Estate Agent at Perrone Realty.
Florida Short Sales Realtor:
Phone: (407) 374-3123.
View My Orlando homes for sale.
Brady Pevehouse specializes in loan modification assistance and short sales in Orlando. Orlando Loan Modification Help, Orlando Short Sales. Orlando Short Sale Realtor. Orlando Short Sales. Orlando Realtor.
Copyright 2011 SFI Marketing Institute, LLC. All Rights Reserved.
Brady Pevehouse, Perrone Realty, and the Stop Foreclosure Institute are not affiliated in any way, shape, or form with the government. Our services have not been reviewed or endorse by the government or your lender. Most lenders willingly work with agents on short sales.
Because most short sales are beneficial to a lender. If you accept our offer to help you on a short sale, your lender may not agree to a short sale or to modify your loan. We do offer a loan modification kit.
However, the likelihood of negotiating a modification is like everything else in life. It takes work and persistence to convince your lender to modify your loan. No matter what you or we do, your lender may not approve a loan modification.
We do not recommend that you stop paying your mortgage, because this will cause damage to your credit and could cause you to lose your home. Because we know avoiding foreclosure is so important to any homeowner, we recommend that you speak with the appropriate legal or tax advisor before making any decision.
This is not intended as legal, technical, or tax advice. Please speak with a licensed professional before making any decision. Information is deemed reliable but not guaranteed as of the date of writing.
You have the option to reject a short sale or loan modification from your lender if it does not meet your approval. If you decide not to go thru with the short sale, then you do not have to pay us our fee. We normally make a real estate sales commission for helping you on a short sale. The views expressed here are Brady’s personal views and do not reflect the views of Perrone Realty.
This information is provided as a courtesy to our viewers to help them make informed decisions.