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If you’re a homeowner, it’s likely that you’ve heard the word foreclosure before. It’s a frightening term for all of us — no one likes to think that something so bad could happen that our home could be taken from us. Unfortunately, there are a number of reasons for foreclosure. One type of foreclosure that’s often forgotten about, but that carries very real consequences, is tax delinquent foreclosure:

What is a Tax Delinquent Foreclosure?

Also known as “property tax foreclosure,” “property tax forfeitures,” and “foreclosure due to delinquent property taxes,” a tax delinquent foreclosure occurs when a homeowner is unable to or does not pay his or her property taxes.

How is Property Tax Foreclosure Different from Regular Foreclosure?

In a property tax foreclosure situation, your home is seized by the county rather than your mortgage lender. Most foreclosures that occur due to unpaid property taxes happen because a homeowner who owned their home outright — and didn’t owe anything on the house to the bank — fell behind on their property tax payments. Since the bank has no interest in your home (because there is no loan on it) they won’t step in to stop the foreclosure.

Can I Have a Property Tax Foreclosure if I Have A Mortgage?

Yes. But, depending on your lender, it might work a little differently. Owed property taxes, also called liens, have priority over other liens. That means if the county forecloses on your home and sells it, your mortgage would be wiped out, and your lender wouldn’t receive any money for the amount left on your mortgage loan.


Because the bank wants to protect their interests, many lenders factor property taxes into your monthly mortgage payment. This way, they pay the property taxes for you out of that monthly loan payment you make.


If your lender doesn’t pay property taxes out of your mortgage payment, then they will likely step in and pay your unpaid property taxes once it’s become clear that you have not paid them. Your lender will then turn around and ask for those additional funds from you.


If you are unable to repay your lender for the amount of your property taxes and keep up on your monthly mortgage payment, your lender may start the foreclosure process on your home. This won’t be a tax delinquent foreclosure, but a foreclosure all the same.

How Can I Stop a Property Tax Foreclosure?

In the state of Michigan, you actually have three years to stop a property tax foreclosure. If you stop paying property taxes in March of 2016, the county will not foreclose on your home until March 31, 2019.


Though this might seem like a lot of time, it’s important to remember that it’s better to pay your property taxes as soon as possible. After one year of unpaid property taxes, the county will require that you pay all outstanding taxes, fees, and accrued interest on the taxes at once, otherwise, you won’t be able to keep your home.


Would you like more information about tax delinquent foreclosures? Visit our page dedicated to explaining the tax delinquent foreclosure process.  We explain your options for avoiding a tax delinquent foreclosure and offer an in-depth timeline of Michigan’s three-year property tax foreclosure process.


If your home is at risk of property tax foreclosure, please give Renewed Homes a call at 269-362-0931 or contact us online. We can make you an offer and help you close before March 31st, leaving you without property tax debt, no foreclosure on your credit record, and the cash you need to move on comfortably. Get in touch for your personalized cash offer today.