The bottom line is that the taxes will need to be paid before the home can transfer title. If this is an actual bank-owned (not a short sale), You can expect the bank to pay this when it closes. This is typically a seller cost.
On a short sale this can go either way.
Regardless, get a copy of the HUD1 which shows the allocation of costs and you can talk to escrow if you have any questions or concerns.
Buying REO, is like buying any other regular property with exception of some disclosures that the owner lender does not have to provide you with. Also REOs are coming with another agreement on top of the regular purchase agreement. Make sure to read that and pay attention to the detail of that agreement. Most of the time if you buy a REO and apply for a loan, your mortgage lender will have to have the clear title before grant you that loan. Meaning, once the prilim title report showes unpaid property taxes, the owner/bank must pay it before closing (unless otherwise stated on that supplemental agreement). The rest is almost the same as any other transaction. I would suggest to work with a professional when you want to buy a REO property or any property. You should not go into any real estate transaction by yourself.
Shadi Kian- Broker
Margaret, since you didn't call OCWEN on the carpet to pay for those back taxes, you'll most likely end up paying them if you decide to sell--unless you can negotiate something with your buyer.
There should be verbiage in the contract that says that the seller is responsible for prorated taxes up to the date escrow closes. This may be in the original contract likely the California Association of Realtors form Residential Purchase Agreement (RPA) or in the addendum/contract the bank asked you to sign.
You should speak with your real estate agent to confirm this and/or talk to escrow and review your estimated HUD1 which is your estimated settlement statement.