We Answer a Question From a Local Homeowner Facing Foreclosure

Bountiful UTAH - I recently received  from a local homeowner that is facing foreclosure.  I'll call him "Scott" to protect his identity.  (Foreclosure is embarrassing and I don’t want to put his name out there.) 


Scott asked, “I am 6 months behind on my mortgage payments. I just got the tax bill for 2010 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 Scott’s Question. 
It all depends on what his plans are and how tight he is on money.



Most people in Scott's situation fall into one of 3 categories.
Category 1. 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.
Category 2. They don’t want to keep their home. They might be thinking about a short sale or deed-in-lieu of foreclosure.
Category 3. Cannot afford to keep their home, but want to stay there as long as possible. Maybe they bought an expensive home and are not making the big bucks anymore. They may have used creative financing to purchased more home then they could afford, possibly using an option ARM style loan.  But, the bottom line is that they can afford to rent a smaller, less expensive home.


First a little background on Scott. 
Scott is in Utah. In Utah, 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. There 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 are my answers for how Scott should handle this tax bill.
If he falls into Category 1: Pay the tax bill as soon as possible AFTER your loan mod is approved. However, Scott should first attempt to negotiate a successful loan modification with his lender.  Most lenders want or require a “good faith down payment” to modify a loan. So until the modification is approved, Scott should save all his available money for the loan modification down payment.  Why? Because if the loan modification is not approved, then Scott would have wasted his hard earned money paying the taxes on a home that he will not be able to keep. It will be just one less payment for the bank after they foreclose.


If he falls into Categories 2 or 3: 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. Scott 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 short sale? I can help you short sale your property and never pay the bank another penny. Send me an e-mail at utahhomesaver@gmail.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 801-651-0707.


Thinking about a loan modification? Our Utah loan modification kit has the instructions you will need to get a loan modification approved with your bank.  Call me today at 801-651-0707 or Email: utahhomesaver@gmail.com to request a FREE copy of our loan modification kit today.

Thanks for reading this, Dave Forsberg.

Dave is a Realtor at Prudential Utah Real Estate - Bountiful.

Phone: (801) 651-0707

Email: utahhomesaver@gmail.com

Dave Forsberg and The Utah Home Saver Team specialize in helping Davis County, Utah Homeowners short sale and never pay the bank another penny. Bountiful Loan Modification Help, Bountiful Short Sales. Bountiful Short Sale Realtor. Bountiful Realtors. Bountiful Realty. Bountiful Realtor. North Salt Lake Short Sales. Woods Cross Short Sale Realtor. Centerville Short Sales. Farmington Short Sale Realtor. Fruit Heights Short Sales. Kaysville Short Sales Realtor. Layton Short Sales. Layton Short Sales Realtors. Syracuse Short Sales. Clearfield Short Sales Realtor. Davis County Utah Realtor.