Buying a home in a tax lien sale

"Every year, $7 (billion) to $10 billion in property taxes go delinquent," says Howard Liggett, executive director of the National Tax Lien Association in Pensacola, Fla., a trade association of investors, tax collectors and service providers involved in tax lien sales. "The subprime mortgage crisis has spiked those numbers. For example, four of the 67 counties in Florida saw spikes of 30 percent to 33 percent in the number of tax liens offered for sale last year."
Homes on the auction block:
Tax collectors in 29 states, Washington, D.C., Puerto Rico and the U.S. Virgin Islands use tax lien sales to force owners to pay unpaid property taxes.
"It's a method for people responsible for collecting property taxes to make everyone pay their fair share," says James Hughes, president of SRI Inc. in Indianapolis, who's represented governments in tax lien sales for 20 years. "If there were no enforcement, nobody would pay their property taxes."
The process varies by state, but here's how it generally works: When property owners don't pony up for their property taxes, tax collectors wait the time period required by state law and then put those unpaid property taxes up for auction.
"The time period varies from just a few months to several years," says Hughes. "In Florida, if owners don't pay taxes due in April, tax collectors will sell a lien June 1. In Indiana, it's about 15 months before a property goes to a tax sale." (bankrate.com)