Does a Tax Lien Get Paid Before a Mortgage Lien?

The quick answer is YES, a government tax lien takes priority over the first mortgage lien holding bank. Unlike a standard mortgage, the bank doesn't have a say in subordinating their loan, a tax lien simply jumps the queue and is first in line to be paid off in foreclosure proceedings. If the buyer has been paying their mortgage on time but not their back taxes, this will result in either a tax lien sale of a tax deed sale.   One of the first items a title company will check for when running a title search is the existence of any unpaid tax liens on the property. A property tax lien runs with land, as they say, and will be inherited by the new owner of the property. However, the chances of an unpaid property tax lien passing to the new owners of a property are slim to none. Property tax liens are public records and the title company would have to be very negligent to let one slip through. In the event a property tax lien did slip through, your title insurance policy would cover the unpaid lien, and the new owner would not have to come out of pocket for it. < Prev   Next >