The sweet deal between Indymac & the FDIC
25% of mortgages underwater
Automated short sales on the way
Fed lays groundwork for higher rates w/ unexpected hike in “Fed Discount Rate”
Nevada gets federal foreclosure aid
FillAnyPDF is a fairly simple web app which allows you to upload a PDF file, then easily write on it wherever you want. This
allows you to easily fill out any form, even if they‟re not in an editable PDF form. You can also share your blank form with
others, so you can collect forms from a group easily. FillAnyPDF also supports electronic signatures and has a repository of
Mint is a popular financial planning web app, with a whole suite of functions for keeping track of your money. The fact that
you‟re entrusting information about your bank account, investments and other assets may make some wary, but Mint has a
strong track record, and a compelling featureset. With a Mint account, you can see a breakdown of your monthly spending by
category, and you can define your own budget and see if you‟re sticking to it.
If you want to send a file to somebody that‟s too big for your office‟s email server, and you don‟t want to mess with the wait
times associated with one-click hosting services like RapidShare, look into YouSendIt. YouSendIt lets you upload a file (up to
100 MB for free, or up to 2 GB with a paid account), then email a link to that file to the intended recipient.
Newsmap.jp (don‟t worry about the .jp domain, it‟s not Japanese) is a web app for people who find the news just a little bit
too… drab. Newsmap creates a colorful treemap out of the news, arranging popular stories on web news sites into squares.
The bigger the square is, the more important the story. You can sort stories by type (world, national, business, etc) or by age,
if you‟re only interested in the most fresh stories.
Colorado (9% plus federal discount rate)
Illinois (18% for 6 months)
Maryland (10 to 24%)
New Jersey (18%)
New York (10 to 14%)
South Carolina (12%)
South Dakota (12%)
Washington D.C. (18%)
West Virginia (12%)
In a tax lien state, counties do not sell property; rather they sell their lien for unpaid property taxes. This lien is
an encumbrance or enforcement right held by the county.
While the lien does not grant full ownership rights to the property, it does provide the investor with two
1) The right to receive interest penalty charges if the lien is paid off by the delinquent property owner, and
2) The right to foreclose the tax lien and take title to the property if the lien is not paid. Even better the
property tax lien is a high priority lien superior to judgment liens, mortgage liens, trust deeds, and other
1. The winning bidder at a tax lien auction is issued what is known as a tax lien certificate for the property.
2. The original owner will often have a period of time to redeem the property, which is known as a redemption period.
3. During this time, interest is accruing on the property that must also be paid to redeem the property.
4. If the property is redeemed, the investor (holder of the lien certificate) profits by collecting the interest.
5. If the property is not redeemed, the investor has the right to obtain the deed to the property.
• Price of lien bid up based on competition
• Price paid for lien may be bid higher, but
interest rate is fixed
• Ex States: Alabama, Georgia, Indiana,
Montana, & Kentucky
• Interest rate earned on certificate is bid down
• Winning bidder is person who accepts the
lowest interest rate payable on the lien
• Ex States: Arizona, Florida, Maryland, New
Jersey, & Missouri
1. Premium. Under this method, the investor willing to pay the highest "premium" (or excess above the lien amount) will be the
winner. The premium may or may not earn interest, and may or may not be paid back to the investor upon redemption of the
lien. (Colorado uses this method)
2. Random Selection. Under this method, a bidder will be randomly selected from those offering a bid. Usually a computer is
used to make the selection, but in smaller jurisdictions more rudimentary methods may be used (Larry Loftis, an attorney and
professional tax lien investor from Orland, FL and an author on the subject, mentions in his book of an Iowa county whose
random selection method consisted of drawing numbered ping-pong balls from a small bucket). Nevada uses Random
selection since it is supposed to be the first buyer but it is hard to determine who was the first person to the sale.
3. Rotational Selection. Under this method, the first lien offered for sale will be offered to the investor holding bidder number
one, who has the right of first refusal. If bidder number one refuses the lien, bidder number two may then bid. However,
bidder number one will not be offered another lien until his number comes up again in the rotation. The next lien will go to the
next number in line. Under this method, the investor has virtually no control over which liens s/he will obtain in the bidding,
except to take or refuse what is offered.
4. Bid Down the Ownership. Used in Iowa and few other states, the investor willing to purchase the lien for the lowest percent
of encumbrance on the property will be awarded the lien. For example, a bidder may agree to take a lien on only 95% of the
property. If the lien is not redeemed, the investor would only receive 95% ownership of the property with the remaining 5%
owned by the original owner. In practice, few investors will bid on liens for less than full right to the property or sale proceeds.
Therefore, with multiple owners bidding on 100% encumbrance, the process then generally reverts to the random selection.
OTC certificates –
is one that did not sell at the live auction. In many states, when the
certificate does not sell, it is "struck off" to the county.
The county has a list in their office that you can typically access online or
call & request it. You can purchase these either online or via mail,
eliminating any need for travel. No restrictions exist on who can
participate in these sales
Cautionary Note: they are often not sold for a reason. Make sure you do
a good amount of due diligence on the property.
For example, at the 2003 Maricopa County , Arizona tax sale 21,200 liens were available for sale but only 14,156 liens were
sold. A total of 7,044 or approximately 33% of liens were made available for purchase after the tax sale. In 2004, that
percentage totaled 27% and was still within the historical range of fluctuation. Although Arizona ‟s Maricopa County is a very
popular destination for tax lien investors, literally thousands of liens are still available for purchase after each sale. Such liens
would still carry a full 16% interest rate for the investor. While such a large inventory can create confusion for the investor, a
systematic process for eliminating liens can transform this into a simple yet profitable exercise.
Track down county‟s website
Enter parcel number
Pull up tax records
Compare to amount delinquent (for all previous years)
Check Google Earth
Call local agent about potentially relisting property
Preliminary title report
1. The Right to Collect Interest or Foreclose: The prudent investor will earn profit on the lien certificate no matter the outcome. If the lien is
paid off by the delinquent property owner through redemption, then the investor can generally expect to receive a double digit return on the
original investment. On the other hand, if redemption does not occur then the investor can foreclose on the certificate. After foreclosure, the
investor will obtain full ownership rights to the parcel. Moreover, since property taxes are a small percentage of market value, the investor
stands to earn substantial profit on the transaction.
2. A High Priority Lien Holder Position: At the tax sale the investor purchases a tax lien once held by the county. The priority position of the
property tax lien is not subordinated (or diminished) because a private party now holds the lien. The investor holds the same rights once
held by the county. Because the lien occupies a first position on the land title, foreclosure of the tax lien clears almost all other liens from the
title. Foreclosure not only places full property ownership in the hands of the investor, but it purges the land title of other subordinate liens
and debts. The end result is a property interest that is generally „free and clear‟ of other obligations on the title. NOTE: Exceptions will be
discussed in Section VI.
3. No Landowner Liability or Maintenance Responsibility: An often forgotten benefit of tax lien investing is the passive nature of the
investment. Only one state grants the purchaser of a tax lien possession of the property. In all other states, the investor does not obtain
possession by purchasing the tax lien. The investor is simply a super priority lien holder, but not a property owner. Because the tax lien
investor is not a possessor of property, there is no landowner liability. This is clearly an advantage as lawsuits against property
owners/operators continue to rise. According to The Wall Street Journal (Feb 2003),
4. Enforcement Rights Without Enforcement Duties: Another advantage is that the tax lien investor need not demand payment or start
collection efforts to compel payment from the delinquent property owner. Although the lien is now owned by a private investor the county will
still handle enforcement of the lien until foreclosure. Some states will actually handle the foreclosure process for you. Irregardless, there is
no contact with the delinquent taxpayer. Moreover, in the redemption scenario most state tax offices handle the collection of redemption
money plus interest. The investor will receive notice that payment has been made to the county. Most states will require the investor to mail
back the actual tax certificate in return for the funds invested plus interest.
5. The Right to Purchase Later Year Tax Liens: Liens sold at auction are only for one year‟s delinquent taxes. If the property owner defaults
on next year‟s taxes then the investor has the right to privately acquire these taxes with no competition. This can maximize investment
performance depending on the tax lien jurisdiction. It also reduces research time since the investor will already be familiar with a particular
In a tax deed state the county will sell all of its rights to the property at a public
foreclosure auction or through a later assignment process. The sale will generally
occur 3 to 5 years after the first tax payment becomes delinquent. Property is sold for