Q: Can one town foreclose if the property is in two separate communities and other town's taxes are current?
I bought a home that's 1/2 in 1 town and 1/2 in another - the dwelling is > 80% in Town A. Original mortgagee escrowed & paid property tax only to Town A. The mortgage has been transferred twice & modified once, & still the error wasn't discovered. Now, over 10 years in, I discover tax lien on the property from Town B. With penalties/interest, $75K and growing. Home is worth $200K & $125K is owed on mortgage. I'm questioning the ability of Town B actually taking their 1/2 of the property for nonpayment. While they could take my backyard (which would then be landlocked), could they take the rear wall and maybe 3 feet of the rear rooms of my dwelling?
1. Do I refinance & add $75,000+ to my principal to clear the debt. While this would allow me to slowly build equity again, it would significantly raise my monthly housing cost. Or
2. Continue with my low monthly payment, keeping the mortgage & Town A taxes current. I realize I would not be building any equity be
A: I think Town B probably has a right to foreclose on its lien but my guess is it has not done so because of the issues you raised. Whether Town B does or does not foreclose, I do not see any alternative but your #1. I do not see the value of ignoring Town B. You already have no equity in the property, paying Town B is the only way to get equity back.
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