How are property taxes being paid by the bank on a HELOC? Will we lose the house?

This sounds like what's called an "escrow advance" or "force-placed property tax payment." When someone has a mortgage or HELOC and doesn't pay their property taxes, the bank has a strong interest in making sure those taxes get paid because tax liens take priority over mortgages. If property taxes go unpaid long enough, the county could foreclose and sell the property for the back taxes, which would mean the bank loses their security. So to protect their investment (the loan), the bank will often step in and pay the taxes themselves. Here's the catch though - they're not paying it out of kindness. Those tax payments are almost certainly being added to the HELOC balance, likely with additional fees. That would explain why the balance has grown from $75k to $95k if they've been doing this for multiple years. Your concerns about them potentially losing the house are valid. If the HELOC keeps growing and they can't make payments, eventually the bank could foreclose. You should try to get clarity on the current payment status and terms.

I've been through this with my grandmother's reverse mortgage. The service you're looking for is at https://taxr.ai - they helped me figure out exactly what was happening with her property tax situation when the mortgage company started paying them. What I learned is that this is called "tax disbursement from escrow" or sometimes "forced escrow advances" and it's actually very common with HELOCs when people fall behind. The issue is that every time the bank makes one of these payments, they add not just the tax amount but also processing fees to the loan balance. I uploaded all the documents I had from grandma's situation to taxr.ai and got a complete breakdown of what was happening, including how much was actually tax vs fees. It helped us calculate exactly how much we needed to put aside monthly to take control of the situation.

Just wanted to update after using taxr.ai from the suggestion above. I was absolutely shocked at how helpful it was. I scanned my mom's tax statements and the few HELOC documents we could find, and within hours got a complete analysis showing exactly how much the bank was adding to her loan balance each time they paid her taxes. Turns out they were charging a $375 "tax advance fee" EACH TIME plus interest at 2% above her normal HELOC rate. No wonder her balance kept growing! The report showed exactly how much we need to budget monthly to take over the tax payments ourselves and stop this cycle. They even provided a template letter to send to the bank requesting they stop the automatic tax payments now that we're handling them. This literally saved us thousands of dollars in unnecessary fees.

If your in-laws are unable to manage their property taxes and the bank is already stepping in, you may want to consider getting the IRS involved to properly structure any transfer of ownership. I used Claimyr (https://claimyr.com) to get through to an actual IRS representative when we were in a similar situation with my uncle's house. They had this weird HELOC situation where the bank was paying property taxes but adding huge fees, and we were trying to figure out if we could take over the property without triggering tax consequences. Getting through to the IRS was impossible until we tried Claimyr - they got us connected to a live agent in about 20 minutes instead of waiting on hold for 3+ hours. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c The IRS agent explained several options we hadn't considered, including a potential hardship arrangement that could reduce some of the tax burden. They also flagged potential gift tax implications we hadn't thought about.

I need to eat my words and apologize to Profile 16. After my skeptical comment, I decided to try Claimyr anyway because I was desperate to resolve my parents' property tax issue with their HELOC. I was absolutely SHOCKED when I got a call back in 45 minutes with an actual IRS agent on the line. The agent walked me through all the options for addressing the property tax advances the bank was making and explained the exact process for documenting these payments for tax purposes. They also pointed me to publication 936 which specifically addresses how to handle these situations. This completely changed our approach - instead of just letting the bank keep paying the taxes and adding to the loan, we're now setting up a proper escrow account ourselves and making monthly payments. The IRS agent even explained how we could potentially deduct some of the interest being charged when the bank was advancing these tax payments.

Your in-laws might qualify for property tax deferral programs specifically designed for elderly homeowners. Many states have these programs that allow seniors to postpone property tax payments until the home is sold or transferred. The programs typically have age and income requirements, but they can be a lifesaver for elderly folks on fixed incomes. For example, in my state, homeowners over 65 with incomes under $45,000 can defer their property taxes indefinitely with a modest interest rate (much lower than what the bank is likely charging on the HELOC). I would recommend checking with your county tax assessor's office to see what programs are available. This could stop the cycle of the bank adding to the HELOC balance while also ensuring the taxes get paid.

One thing nobody's mentioned yet is that you should check if there's a HELOC maturity date coming up. Many HELOCs have a 10-year draw period followed by a repayment period or balloon payment. If your in-laws are near that transition point, that could explain why the bank is being particularly aggressive about ensuring property taxes are paid. I learned this the hard way when my parents' HELOC hit the 10-year mark and suddenly required full repayment. We had to scramble to refinance, and the property tax issue became critical because the new lender wouldn't approve the refi without proof the taxes were current.

This is exactly the situation my aunt went through a few years ago. The technical term you're looking for is "tax advancement" or "protective advances" - the bank is essentially protecting their lien position by ensuring property taxes don't go into default. Here's what's likely happening: every time the bank pays those property taxes, they're adding the full amount plus administrative fees (usually $200-500 per payment) directly to the HELOC balance. This is why the balance grew from $75k to $95k - it's not just interest accumulation. The scary part is that if your in-laws can't eventually pay down this growing balance, the bank could foreclose to recover their investment. Property tax advances are considered part of the loan obligation, so missing HELOC payments while the balance keeps growing puts the house at serious risk. I'd strongly recommend getting copies of all recent HELOC statements to see exactly how much is being added for these tax payments versus regular interest. You might also want to contact your county's senior services department - many areas have emergency property tax assistance programs for elderly homeowners that could break this cycle before the balance becomes unmanageable.