A mortgage foreclosure can be a very complicated matter for the lender, the borrower and any other parties that may be involved. In a simple mortgage foreclosure, the other parties involved will be the lender and the borrower. The lender is usually a bank or other financial institution. In some situations, there may be a tax lien on the property. The tax lien may be from the IRS for money owed the government, a state tax lien for fines and fees owed or a county lien for delinquent property taxes. In situations like this, the question regarding the ability to extinguish a tax lien by foreclosure on a first mortgage has always risen.
In certain states the law varies regarding the right to extinguish tax liens with foreclosure on a first mortgage. These laws may be affected by the type of foreclosure sale it is. It is also depends on the type of tax lien that’s on the property. There are certain circumstances where the lender can extinguish tax liens with foreclosures on a first mortgage. This is particularly true with tax liens from the county or state. Liens by the Internal Revenue Service may or may not be extinguished depending on certain situations, mostly what type of notice they are given regarding the impending foreclosure.
In most states, a mortgage is a lien that takes precedence over any other liens that may be put on the place. But, this does not mean that it can extinguish tax liens. Foreclosures of first mortgage must take place in a legal manner, by proper notification to the other lien holders. Banks cannot automatically extinguish tax lien with foreclosure of first mortgage if there are ad valorem liens, federal tax liens or Uniform Commercial Code financial statements against the property. For instance, in the state of Alabama, the IRS requires at least 25 days notice of a mortgage foreclosure if they have a lien on the property.
In this case of the tax liens being extinguished, the IRS continues to have the right to redeem the property within 120 days of the sale date if the bank extinguished the tax liens. They also can maintain their tax liens on any excess of the proceeds after the bank gets what’s owed to them.
There have been cases that have been taken into court to battle the question of extinguished tax lien with foreclosure first mortgage sales. This often also happens in the case of delinquent property taxes where parcels of land are sold at bid, yet the lender still holds the title to the property. Always check your state laws to be sure of the laws regarding mortgage foreclosures and junior liens.
Doral Financial Corporation is a banking company that operates as a financial holding company that deals in many facets of banking including investments, mortgage banking, insurance agencies and banking in general. The current financial statements have specific data involving the Doral Financial Mortgage Foreclose rate. The Federal Reserve is very concerned about the recent trends in the mortgage market.
The Doral Financial Mortgage Foreclosure Rate has risen recently with both mortgage delinquencies and foreclosures. The borrowing section that has been most affected by the increase are the subprime borrowers. The members of the committee working for Doral Financial have been meeting regularly to determine the best ways to deal with the Doral Financial mortgage foreclosure rate and how to help the borrowers keep their homes. The lenders at Doral Financial have always been well known for doing everything possible to help their customers maintain the best possible financial holdings.
In addition to be concerned about the Doral Financial mortgage foreclosure rate, they've also been concerned about what affect this will have on the financial stability and health of the lending institution as a whole as well as the mortgage borrowers. Since the largest amounts of delinquencies and foreclosures have been with the subprime borrowers, this is the group the bank is trying to help and focus their efforts on. The housing credit has deteriorated in this borrowing group, which only is a small total of the mortgage loans at Doral Financial. The mortgage foreclosure rate seemed to increase in the latter part of 2006, with many of the loans being mortgages that originated in 2005 and 2006.
The lenders are Doral Financial are working very hard to improve their standards of lending as well as help the borrowers. They don't want this to have negative consequences for the borrowers hoping to purchase a home. They also don't want to limit the borrowing abilities for those that are able to repay the loan. Unfortunately, when one segment of borrowers begins to have problems paying their loans, it affects other groups of borrowers as well. In fact, it affects all the borrowers. When the banks lose money because of financial losses from delinquencies and foreclosures, all the borrowers have to absorb the loss in terms of higher interest rates, etc.
Presently at Doral Financial, subprime lending has increased in recent years and homeownership is still very possible in this borrowing group. Hopefully, with the economy improving, the Doral Financial mortgage foreclosure rate will decrease. Their lending staff will continue to monitor the situation so they can continue to help put borrowers into new homes.
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