what liens get wiped out after an investor buys at auction


#1

My question is if a purchase money first deed of trust in california recorded 11/04 is purchased at auction by an investor would an abstract of judgment recorded 7/12 and a notice of state tax lien from the Employment Development Department recorded 11/11 be wiped out.? I am thinking they would since they are both junior liens. Thanks for the help.


#2

Sean you said: “If the IRS lien was recorded first then yes, it is a senior debt, and like ALL senior debt it must be paid by the buyer at trustee sale.” I want to bid on trustee sale property that is junior to a senior IRS lien, but as it is an all cash sale to the winning bidder, how exactly do you pay off a senior IRS lien at the sale? Or is this something you do in the intervening time while the Tustee Deed id being processed? Thanks in advance>


#3

When you take a property subject to any senior lien, there is no rush to pay it off - unless of course it is set for some kind of lien sale itself in the immediate future.


#4

I forgot to mention - and someone else will need to jump in - but can the IRS still add amounts, fees etc. to a recorded tax lien? IOW, can you rely on the recorded amount.


#5

Exactly, In my case, Im looking at an auction where I would be bidding on a note junior to an IRS lien. So I pulled a copy of the IRS lien from NETR online and the IRS lien, filed in 2005, is around 6k (lists only one tax year ), not a deal killer if the 2nd (foreclosed note) at the sale is a bargain. But Ive tried to call the IRS to get the current balance on the lien and it was a no go due to taxpayer privacy laws. Does anyone know how to get an accurate payoff on a senior IRS tax lean prior to an auction of a note junior to it? Or does anyone know if the IRS has to file a new lien for every tax year not listed on the original lien? Reallly appreciate all input on this.


#6

HI MRH, You may want to reach out to your local title company to see if they can help you. I would point out that if the foreclosing lender (junior to the IRS lien is an institutional lender it is LIKELY that this IRS lien was paid. I have never seen an institutional lender that will fund a loan behind an IRS lien. That said, it could be a title error and the title company missed the lien. This is where a good connection with a title officer can be worth their weight in gold.


#7

According to the chain of title, it was USC Credit Union that funded the original note ahead of (junior) to the IRS lien. I agree it makes no sense that the lender may have overlooked it, but then again, it still remains. I did order a Trustee Sale Guarantee, which does list it, so I will try First American Title, who issued the TSG, and see if they can’t at least verify that the the IRSl ien is still on. But if it is, I am still in the dilema of verifying the pay-off balance, which at this point I am unable to confirm how that is done prior to the Trustees sale. At any rate, do apreciatte the tip…