Who Gets The Check
I have a friend that will receive insurance money for damage to one of his properties. The property has back taxes. He wants to know if the insurance company will issue the check to the city and then the city will disburse the remainder of the funds to him after the tax balance is deducted. Or will the insurance company issue the check directly to him?
[ Edited by newtree on Date 12/05/2008 ]
The insurance check WILL go to the owner AND the mortgage company jointly if the property is encumbered by a mortgage.
Back taxes will have no standing in this matter.
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From first hand experience, I agree with the first paragraph of the bargain76 post. The mortgage company will most likely require your friend to pay the back taxes, especially if taxes are escrowed.
Thanks for all of the good info. The is no mortgage on the property. He owns it free and clear. The property was under foreclosure, but the bank just released the property to him. I guess they already had enough foreclosures on their books.
Extremely good info, NewKid!
Thanks
I had a property insured by Shelter Insurance. Was renting it out and it caught on fire, total loss. Insurance co made a check out to Bank for amount owed them and a check out to me for the difference. Maybe it all depends on the insurance company.
I just filed a claim for a new roof--hail damage--on a house I bought Sub2 under the previous owners policy. Policy was replacement cost. They paid (check made out to him only; I lobbied adjuster for that) upfront for depreciated value of new roof, then paid the rest after I sent the invoice for the new roof. The adjuster had to go back and verify roof was put on. Then they sent the rest, which they called "depreciation amount."
End result: I got a new roof for the $500 deductible, I never insure for $500 ded. replacement cost, but my Sub2 seller did, very good for me. Old roof was OLD and needed replacement anyway, but the hail storm a year ago allowed me to get a new roof almost free. Pretty good deal!
As I recall, Citimortgage said they would have had no problem applying my insurance check to principal if it were $10K or less....But my original check was over $30K. Maybe a different set of rules as payout amount increases.
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Quote:
On 2008-12-06 21:26, TaxLienLady wrote: IN PART
Also were you aware that you can also pay the subsequent taxes in NJ and have them added to your lien. You get the maximum interest on your subs, which is 18% if the delinquent amount is $1500 or more. For delinquecies less than $1500 you get 8% on your subs until the delinquent amount is $1500 (this includes the certificate amount, subsequent taxes, and any prior liens) and then you receive 18% on anything after that.
Quote:
On 2008-12-06 21:26, TaxLienLady wrote: IN PART
Also were you aware that you can also pay the subsequent taxes in NJ and have them added to your lien. You get the maximum interest on your subs, which is 18% if the delinquent amount is $1500 or more. For delinquecies less than $1500 you get 8% on your subs until the delinquent amount is $1500 (this includes the certificate amount, subsequent taxes, and any prior liens) and then you receive 18% on anything after that.
Without spending a lot or time and doing the numbers, on the surface, it looks like if the lien was $1300 or $1400 you would be better off just bidding $1500 to increase the interest from 8% to 18%. Should I look at this closer or did I GUESS right?
Here in MO our state law says bidder will be paid UP TO 10% per annum. Some counties pay 10%, some 8%, and one county that I know of only pays 5%.
In NJ, the "bidding" is on the rate of interest ... not the amount of the lien. Bidding begins at 18%, and descends until the rate of zero is reached... then the premium bidding begins.....
If you have to ask "what is premium bidding" you need to attend a couple of muni tax lien sales to get the lay of the land.
Thank you everyone for your feedback.
Is the 2-6% penalty added to the original lien or subsequent taxes or both?
So, if the first lien holder pursues foreclosure, would he have to pay back my lien amount plus the applicable interest? What if I buy the subsequent taxes owed?
Likewise, if I decided to foreclosure, I would need the first lien holder to assign his lien to me?
thanks for your help.
Let me clarify: I did buy the second lien but what about the 2008 subsequent taxes due. I believe I have the right to purchase these at 18% not the original lien purchaser, correct?
You need to research your state/county law on tax sales. In some states, the tax lien purchaser needs to pay the property tax bills that come due in order to retain his right to foreclose on his lien.
What is the law in your state/county?
I will have to check the law in relation to the foreclosure procedure and lien purchasers.
thanks guys.