Here's where this starts falling apart and why the lender stays on top of these defaults. It also supports why I posted the lender would have required the taxes to have been brought current under the sale.
IGlow posts on first in line was correct. Property taxes in most jurisdiction trump the mortgage. All the more reason the banks don't let these slide beyond two to three years. The ONLY reasons banks will look the other way is they have a catch 22 in the current markets.
Once a bank posts the loans in default, they are required to book the loan in a manner that creates a liquidity demand to meet regulations with FDIC and the bank examiners. Meaning they start calling in lines of credit to create liquidity, it's what we call a snowball effect. Or what can lead to a run on a bank.
As for anyone stepping up to buy the tax lien. This assumption is based on the asset having equity.
Like I posted earlier, this property like so many other commercial loans are under water when you have to take into account todays interest rates. This is why the feds and the banks are running scared right now. Many banks, including the largest ones out there are NOT booking the true value of the assets and just how poorly funded they are. This is likely why we haven't seen the bank call the loan YET, assuming they haven't already.
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