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How does bankruptcy affect title of a home?
A home owner with health issues moved out in 2015 and before she could return to the house she died. A closer look and she had declared bankruptcy in 2012.
The property was sold at the property tax auctions in 2018. How did the bankruptcy affect the status of the home? Why did it become a property tax sale and not foreclosure. Thanks.
Yes true but the house was not fully paid for. Mortgage payments were still due when she died. Thanks.
4 Answers
- Anonymous3 weeks agoFavorite Answer
Bankruptcy doesn't affect title of home one bit.
"Why did it become a property tax sale and not foreclosure." Property tax sale relates to delinquent property tax. Foreclosure relates to delinquent mortgage payments. Two completely different things.
ETA: "Yes true but the house was not fully paid for. Mortgage payments were still due when she died." So what? An outstanding mortgage doesn't preclude a home from being sold.
- Glenn SLv 73 weeks ago
Because at a tax lien sale it generally extinguishes all other liens, including the mortgage.
Most of the time a lender will bid on the property that they hold the mortgage on to protect their interest in the property. But that is one of dangers of lending on a junior loan (2nd). The cost to redeem the property might be more than its worth.
- Anonymous3 weeks ago
the mortgage company hadn't started foreclosure yet.....but, usually the bank will still pay the property taxes to protect their interest in the home.
