Will a Tax Foreclosure Sale Wipe Out My Existing Mortgage?

If you’re going through a foreclosure in Texas, we know the process can be frightening and complex. Many of our clients have questions about how a foreclosure sale will affect their current mortgage and how they can stop it. In this post, we’ll answer your questions about what happens with your existing mortgage during a foreclosure. If you have questions about the process, the experienced attorneys at Manfred Law can help.

What is a Tax Foreclosure Sale?

If you’re unable to pay your property taxes, your county or municipality may foreclose on your home and sell it to pay off what you owe. When the county sells your property, it will go to the highest bidder, with the proceeds going towards paying off your tax lien and any other liens. However, you will receive notice long before a sale occurs, which may give you time to work with the county to pay off your taxes and any penalties or fines. 

What Happens to My Mortgage During a Tax Foreclosure?

If your home does go through a tax foreclosure and sale, the tax lien will take priority over any other liens. As a result, a foreclosure sale will wipe out your existing mortgage on the property. As a result, if you have a mortgage on your home, your bank will often collect property taxes as part of your monthly payment, putting the funds into escrow and then paying property taxes on your behalf. But if this doesn’t happen and you make payments directly, your mortgage company may still be able to help.

In some cases, you may have the “right of redemption” even after a property tax foreclosure sale. Under Texas law, you may redeem the property up to two years after the purchaser’s deed is filed in the county records. An experienced foreclosure attorney can help.

You Need an Experienced Foreclosure Attorney

If you’re going through a tax foreclosure sale and are concerned about how this will affect your mortgage, you need an experienced professional guiding you through the process. The skilled team at Manfred Law can help. Call them today at (713) 547-5460 or contact them online to schedule your consultation.