Tax foreclosures are what happen if no one pays on the property that was purchased on. Assuming it on a reasonable piece of property, a tax lien foreclosure will probably never happen. There are several instances where you will be paid before a lien is foreclosed on.

The first scenario is that there is an existing on a property, and you are only the second holder. This would be if you bought out the second year of property tax foreclosures and another person holds the first year's taxes. In this situation, if the first lien holder wants to foreclose on the property, he will have to buy out your position.

The second scenario is that a bank holds a mortgage on the property and the loan is in default. If the loan is in default, the bank will foreclose on the mortgage. Since the lien has a first position above the mortgage, it gets carried along with the house. The bank will then have to pay you off or they will lose the property to you.

The third scenario is if the mortgage is not in default but the property tax is not paid anyways. Usually in this situation, a bank will pay off the tax holder simply because if no one pays off the property taxes before the redemption date, the lien holder will have rights to the property. Tax foreclosures explain that more, if the bank has a $120,000 mortgage on the property and the lien is not paid off by the redemption period, the bank's mortgage will be wiped clean.