Does the Bank Have to Pay Delinquent Property Taxes?
The answer: yes. When a property becomes overdue on its taxes, sooner or later the government will foreclose and sell the property to the highest bidder at auction. When the grace period to pay the taxes off expires, that bidder will apply for a deed to the property and will be the free and clear owner. What does this mean for the bank? What this means for the bank is that if they don’t pay the delinquent property taxes, they will lose their stake in the property. Tax sale wipes mortgages clean (although the mortgage company may be able to sue the owner and obtain a judgment at this point). In order to avoid losing their right to foreclose on the property, banks will pay delinquent property taxes owed to the government. Of course, the owner will then owe that money to the bank. This is why property tax payments are often rolled into your mortgage payment. The bank wants to be on top of what’s going on with the property tax payments. In this case, they will know if you stop paying your
