Surprisingly, payment adjustment on a mortgage was cited as a reason just 1.4% of the time. Any one of these factors, even several of them at once, could cause homeowners to default on their home loans, putting them at risk of foreclosure.
TAX DEBT LEADING TO FORCLOSURE
Sometimes a foreclosure on a home arises from the homeowner’s failure to keep up with paying their property taxes. These taxes can be paid on your own or through an escrow account held by your mortgage servicer. Regardless of the method that you use, a failure to pay taxes leads to a lien that attaches to the home. A foreclosure could result in several ways. The tax agency to which you owe the debt could foreclose on the home and sell it, or it could sell the tax lien, and the purchaser of the lien could foreclose on the home. In other situations, the mortgage servicer might advance payments for taxes if a homeowner has fallen behind, and then it might foreclose on the home if the homeowner cannot pay off the increased fees. A failure to pay income taxes also can result in a foreclosure, but this is uncommon.
FORECLOSURE BY THE TAX AUTHORITY
This type of foreclosure results in a tax sale, which may take the form of a tax deed sale or a tax lien certificate sale. While a tax deed sale involves selling the home and giving the purchaser a deed, a tax lien certificate sale involves selling the tax lien to another party that takes over the responsibility of collecting on the debt. This party then would have the right to foreclose if the homeowner does not catch up with payments and pay off any penalties and interest. The purchaser of the lien alternatively
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