Would past due property taxes be considered an underwriting or creditworthiness condition or a customary commitment or closing condition? I need to determine how we would decision a loan application where everything else is approved; however, the property taxes are past due and remain unpaid. Would this situation be classified as a "denied" or "approved not accepted" application?

Are you going to require Escrow on the new loan?

If no escrow, are you going to then deny because there property taxes are past due and that would be considered being in default if the new loan were made?

Customary commitment or closing conditions include, for example: a clear-title requirement, an acceptable property survey, acceptable title insurance binder,.............

You might want to consider you are unlikely to be able to get acceptable title insurance as past due taxes in many states would represent a superior lien on the property.