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Mortgage Foreclosure vs. Property Tax Foreclosure – What’s the Difference?
If United Overage Recovered Funds LLC has reached out to you, it means you may be entitled to claim surplus funds from a foreclosure. However, the type of foreclosure you experienced determines how these funds became available. Here’s the key difference between Mortgage Foreclosure and Property Tax Foreclosure:
Mortgage Foreclosure
A mortgage foreclosure happens when a homeowner is unable to make their mortgage payments. Since the home was purchased with a loan from a lender (typically a bank), the lender has the right to repossess the property if the loan is not repaid as agreed.
How It Works:
- The homeowner falls behind on mortgage payments.
- The lender issues warnings and attempts to collect payment.
- If payments remain unpaid, the lender initiates foreclosure proceedings.
- The property is auctioned to recover the remaining loan balance.
- If the home sells for more than what was owed, the extra money (overage funds) legally belongs to the former homeowner.
✅ Example: You owed $150,000 on your mortgage, but the home sold at auction for $200,000. The extra $50,000 belongs to you, and we can help you recover it.
Property Tax Foreclosure
A property tax foreclosure happens when a homeowner fails to pay property taxes owed to the local government. Unlike mortgage foreclosure (where a bank takes the home), in this case, the county or state government seizes the property to recover unpaid taxes.
How It Works:
- The homeowner does not pay property taxes for a certain period.
- The county or local government places a tax lien on the property.
- If taxes remain unpaid, the government seizes and auctions the home.
- If the property sells for more than the amount owed in taxes, the extra funds (overage) belong to the former homeowner.
✅ Example: You owed $10,000 in property taxes, but the home sold for $100,000. The extra $90,000 legally belongs to you, and we can help you claim it.
Key Differences
| Aspect | Mortgage Foreclosure | Property Tax Foreclosure |
|---|---|---|
| Who Forecloses? | The lender (bank) | The government (county/state) |
| Reason for Foreclosure | Failure to pay the mortgage | Failure to pay property taxes |
| Who Auctions the Property? | The bank or lender | The local government |
| Overage Funds Available? | If the sale price exceeds the loan amount | If the sale price exceeds the tax debt |
| Who Can Claim the Overage? | The former homeowner | The former homeowner |
