A Texas investor purchases a property at a foreclosure sale. She later discovers that the property has outstanding property tax liens that were not extinguished by the foreclosure sale. Under Texas lien priority rules, why did the tax liens survive?
Correct Answer
D) Because property tax liens in Texas have superior priority over all other liens, including first mortgages, and survive foreclosure sales
In Texas, property tax liens have superior (first) priority over all other liens, including first mortgages and deeds of trust. A foreclosure by a junior lien holder cannot extinguish a senior lien. Since tax liens are always senior, they survive any foreclosure sale conducted by a mortgage or deed of trust holder.
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An adjustable-rate mortgage (ARM) has an interest rate that changes periodically based on market conditions, typically after an initial fixed-rate period. The rate adjustment is tied to a financial index plus a margin.
Closing costs are the fees and expenses paid by the buyer and seller at the closing of a real estate transaction, beyond the purchase price. They typically range from 2-5% of the purchase price.
A conventional loan is a mortgage that is not insured or guaranteed by a government agency such as the FHA, VA, or USDA. It is originated and funded by private lenders and may be conforming or non-conforming.
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