Legal Question in Real Estate Law in California

Re: foreclosure and property taxes

It is possible, though not entirely likely that the advance of the property taxes has nothing to do with the foreclosure. If you read your loan documents carefully, the lender (almost certainly) retains the right to advance certain funds under the loan, and bill them back to you. Insurance is one, property taxes is another. They do this in an effort to protect their collateral. What is more likely is that the lender is being very proactive, and realizing that they are very likely going to get the property back, advanced the taxes to avoid furthe penalties and fees. If you sell the property prior to the foreclosure, the lender will include the amounts advanced in their loan payoff.

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Re: foreclosure and property taxes

When a house sells at a foreclosure, property taxes get paid first. So the lender is taking a very wise move by paying the property taxes so they do not accrue late fees and penalties. Also, the payment keeps the county from doing its own foreclosure so the foreclosure will be on the lender's terms, not the county's.