If the taxes are rolled into the mortgage, then it is still taken out automatically (depending of course how far past due the payments are). But the owner somehow should try to find a way to pay those taxes or at least keep the property from going into a TAX SALE. As an agent, have your owners fill out the forms necessary so the you can talk directly to their mortgage lender. So that you can stay on top of everything going on. The mortgage lender can tell you if the escrows have been paid, in full or in partial. Many of the Title companies have the necessary documentation for your owners to sign for this authorization.

If you are on the market in a short sale situation, first of all, keep reducing the price of the house until you start receiving offers. Every home has its lowest possible price and you will get offers. I would not suggest paying the properties taxes if you have supplied all your short sales documents to your lender which will include a HUD settlement sheet with a list of the potential costs of sale the bank will have to cover in order for the property to close and the new buyer to receive clear title. Any monies you put into your short sale home sale you will no longer recover as the Seller cannot receive any proceeds at closing. Any further questions feel free to ask. I just wrote an article in SRQ Magazine on 2009 Short Sales.

Yes. Here in Texas that is the first thing to get paid. Then the mortgage company. Then the Realtors fees if there is anything left. The sellers are not allowed to make anything.