In most municipalities (that means in most cities and towns), property taxes are due quarterly.

When you buy a home, most likely your lender will ask you to prepay some or all of the property taxes due on your house or condo for upcoming quarter. (So, if you bought today on September 24, your bank may require you pay the remainder of September, maybe all of October, and maybe all of November, at closing.)

Then, going forward, you will probably be required to make estimated property tax payments along with your monthly mortgage loan payments.

The lender then submits your property taxes to your city or town when due, at the beginning of the next quarter.

They do this because if your property taxes don't get paid, the city can put a municipal lien on your property and, worst case scenario, take your property away from you, leaving the bank with nothing to show for their loan.

After the first year, your lender may let you send in the quarterly payments yourself. This is good, because it's your own money, after all. It's bad, if you're not very good at money management. Suddenly you have to come up with three months' of property tax instead of paying one month at a time.

So you might prefer the lender take money from you each month.

Well, unless the lender doesn't then turn around and pay your property taxes on time.

Say, if they go out of business, instead.

Which, of course, is what is happening these days.

From the Globe:

Mortgage financier Freddie Mac said yesterday it settled a dispute with bankrupt loan servicer American Home Mortgage Corp., clearing the way to pay $2.4 million in delayed property taxes on behalf of thousands of homeowners.

Last week Freddie Mac warned in a lawsuit the homeowners faced an "imminent risk" of losing their homes unless it was able to recover files for 4,547 loans - worth about $796.8 million - from American Home Mortgage, which filed for bankruptcy Aug. 6.

Right. Because even though you send your property tax payments to your lender, it is you, Mr or Ms. Homeowner who is responsible for making sure your property taxes are paid.

Your city or town government doesn't want to hear your sob stories.

More: Freddie Mac deal means tax will be paid - Associated Press, by way of The Boston Globe