Why Is A Property Tax Loan Good?

Property Tax Lending in Texas A Win-Win-Win!

A Texas property tax loan:

• pays a property owner’s complete property tax obligation, including any associated interest, penalties, costs, and fees;
• is funded by a third party lender (a family member, a friend, or a business), which is referred to as the Tax Lien Transferee;
• does not create a new lien, but merely transfers the taxing unit’s lien to the Transferee, pursuant to the Tax Code;
• is made only with consent of the property owner, unlike tax lien sales in other states.

Win for Property Owner

• Helps homeowners protect their most valuable and most important asset: their home!
• Eliminates foreclosure worries and stops the collection process.
• Creates time to overcome the financial problems that caused nonpayment of their property taxes (job loss, divorce, health problems, etc)
• More manageable and flexible payment terms than taxing units can offer.
• For commercial properties, the owner can use capital to strengthen their business instead of making a lump sum property tax payment.
• Puts the property owner is back in control of what happens to their property – sell, refinance or stay.

Win for Taxing Unit

• Produces immediate 100% revenue collection
• Improves collection rates, which reduces the burden on those taxpayers that do pay their taxes on time
• Eliminates combative collection relationship with property owner
• Eliminates hassle and expense of collection, foreclosure and bankruptcies
• Keeps home owners in their homes; helps preserve neighborhoods

Win for Mortgage Company and Mortgage Servicer

• Avoids creating an escrow account for the property owner
• Avoids restructuring loan held in a pool or securitization
• Dramatically reduces the possibility of foreclosure
• May reduce total encumbrance on the property, as compared with statutory penalty and interest that otherwise accrue.