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If my house is in foreclosure, am I responsible for paying back and current property taxes? What is included in the foreclosure?

Inglewood, CA |

If my house is in foreclosure, am I responsible for paying back and current property taxes? What is included in the foreclosure? What are the reasons why banks deny offers on a house as a short sale?

Attorney Answers 3


  1. You are legally responsible for all the expenses. Usally the bank will pay to secure their interest.


  2. If you've defaulted on your mortgage, the lender would be entitled to charge you with the amount of the unpaid loan, late fees, and their expenses in foreclosing, which would include the back property taxes and foreclosure fees.

    However, in CA, borrowers are protected from deficiency judgments (the difference between what you owe and what the house sells for at foreclosure) if you have a "purchase money" mortgage, meaning money you borrowed to buy the house, and not a home equity loan, and not a refinanced loan. The bank is the one that takes the risk that the property will be foreclosed, and they can't go after you for the loss they realize when the market turns down and borrowers default.

    Banks deny short sales for many reasons, and sometimes they are just too disorganized with the loans being re-sold so many times that they can't get the loan's owner to approve a short sale, or they have short term time frames and don't want foreclosed property on their books so they might approve a short sale. If they don't mind holding onto real estate until themarket recovers, they might be more inclined to foreclose and keep the property.

    Disclaimer: Please note that this answer does not constitute legal advice, and should not be relied on, since each state has different laws, each situation is fact specific, and it is impossible to evaluate a legal problem without a comprehensive consultation and review of all the facts and documents at issue. This answer does not create an attorney-client relationship.


  3. You are responsible for back and current property taxes so long as you own the property. The bank may include such taxes if included as part of foreclosure. The bank may be denying a short sale in order to foreclose.

    DISCLAIMER & IRS Circular 230 DISCLOSURE:

    The information in this answer is for general information purposes only. Nothing on this communication should be taken as legal advice for any case or situation. Nothing herein is intended as legal advice. You should not rely upon any information as a source of legal advice, and your receipt or viewing of any such information does not create an attorney-client relationship between you and James E. Pratt.

    IRS Circular 230 Disclosure: To comply with requirements imposed by the IRS, we inform you that any U. S. federal tax advice contained herein (including any attachments), unless specifically stated otherwise, is not intended or written to be used, and cannot be used, for the purposes of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter herein.

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