Buying Property with IRS lien


#1

Hope someone can help me on out the below questions

Will a buyer at trustee sale ever be liable for a IRS lien from an foreclosed homeowner at trustee sale?

Will the buyer be liable if the IRS lien is recorded prior to the Trust Deed/Note?

The property I am looking at has an IRS lien recorded in 2005 but a trust deed/note recoreded in 2006. I am assuming that the IRS lien is subordinated when that happened. Is that a safe assumption? If yes, since it is a junior lien, the IRS lien should be discharged subject to the 120 days redemption period. Am I correct?


#2

HI Jack,
If the IRS lien is senior to the Deed of Trust then you could be responsible for the payment of that lien. If the foreclosing lender is an institutional lender it is highly unlikely that they would fund a loan BEHIND an IRS lien. However, title mistakes can be made. I would not assume that it has been subordinated. We rarely see the IRS subordinate to a Deed of Trust. (at least that has been my experience).
If the IRS lien is junior to the foreclosing loan then you would have to wait for the redemption period of 120 days before you could get insurable title to the property.
These are the cases where a relationship with a good title officer is extremely valuable. Do your research on this one!!!


#3

I am new to foreclosure radar. I have researching a specific property and I was wondering if IRS liens would appear on the “transaction history” or anywhere else on Foreclosure Radar’s screen. Should I be doing a more in-depth title search.


#4

You would need to search the Grantor/Grantee Index at the County Recorder to see if there is an IRS lien against anyone who has been in title since the loan was made. In most Counties in Ca. this can be done online. To see the actual recorded lien, you would need to go to the recorder’s office.


#5

What’s the latest intelligence on how often the IRS is redeeming properties?


#6

In the days when people had equity (historical times) they tracked every sale. Now they don’t bother. In a very rare instance a specific agent will be aware of that rare property w. equity. Also, if you want them to spring you loose in less than the 120 day “hold” - they used to try and hold up the buyer by threatening to redeem. Don’t know what the situation is now and who you would contact.


#7

They are inundated with foreclosures now and cannot even keep up. They tried to find buyers for one property in San Diego but they didn’t get any bites on the guaranteed bidders. If you need to sell before 120 days they will work with you to release their right to redeem. First you have to find someone to answer the phone. Their guideline is 25% of lien amount, but they will negotiate down from that, getting lower as the 120 days are running out.