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hi itamp;#39;s ned carey from the baltimore real estate investing blog i recently had a reader ask me can a small tax lien wipe out a large mortgage for example could a 500 tax lien wipe away a hundred thousand dollar well laws will vary from state to state but in maryland absolutely thatamp;#39;s the case thatamp;#39;s the law thatamp;#39;s how it works here however in almost all states whether theyamp;#39;re tax lien states or tax deed states the tax lien holder or the government whoever holds the tax tax position is in first place and if they foreclose then they basically wipe out anyone else with any liens against the property and thatamp;#39;s exactly why when you borrow money from a bank they will normally escrow for the taxes and insurance thereamp;#39;s a term called p-i-t-i which stands for principal interest taxes and insurance and thatamp;#39;s normally what you pay when you make your mortgage payment now sometimes a bank will make a mistake and they wonamp;#39;t pa