Property Taxes Payment Provisions in Your Mortgage
When you are unable to make your mortgage payments on time you are legally in default of your mortgage contract. Default of your mortgage agreement can result in the lender exercising their right to foreclose on your property.
Many homeowners think mortgage lenders cannot foreclose when timely mortgage payments are made. However, mortgage lenders generally have additional provisions in their mortgage contact or deed of trust to further protect their interest in the property. These added provisions require the property owner to maintain hazard insurance and pay their property taxes when due. Failure of the property owner to meet these obligations is also a default of the mortgage contact and can result in foreclosure of the property securing the mortgage. According to a June 2010 story in the "St. Petersburg Times," the Federal Housing Administration and giant mortgage lender Fannie Mae are instructing their mortgage lending partners to initiate foreclosure when homeowners fail to pay property taxes and home insurance. According to the story, foreclosure is particularly being urged for reverse mortgage lending.
Can My Mortgage Company Pay My Delinquent Property Taxes?
We discussed what happens when a mortgage company steps in and pays your past due taxes in a previous blog (see article). Unfortunately, the consequences of the mortgage lender paying your delinquent taxes can be severe, resulting in a significant increase in monthly payments that may be greater than the property owner can afford.
Property Tax Loans Provide Help for Past Due Property Taxes
Property tax loans are readily available for past due property taxes. Loan qualifications are relatively easy, even for those with bad credit. A property tax loan will pay off all delinquent taxes, interest, penalties, and fees. The interest rates are far below annual penalties charged by tax assessors and loan processing times are typically short, generally less than one week.
