Q: in Maryland, are tax sales superior to prior mortages
what happens to the prior mortgages? as an abstractor, should prior mortgages be reported?
A:
Tax sales give the purchaser the right to acquire the property if the property is not redeemed. However, the tax sale purchaser must go through a foreclosure action first and they must name any mortgage holders of record in the tax sale. If no one comes forward to redeem the property and the court issues final judgment for the tax sale purchaser, then yes, the tax sale purchaser would be the new owner and have a superior interest to that of the former mortgage holder. In fact, the tax sale purchaser would get new, clean title free and clear of all prior mortgages.
An abstractor should definitely note any outstanding mortgage that has not been satisfied. Again, the mere fact of a tax sale does not invalidate a mortgage but only a foreclosure case that has gone all the way through. Even there, one would want to know about prior mortgages to see if the mortgage holders were properly notified in the underlying tax sale foreclosure case.
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