Replies to This Discussion

Permalink Reply by Karyl Moore on April 26, 2010 at 3:51pm

I had a short sale with Wells Fargo last year where they paid a $6000 Federal tax lien. It was a $180,000 sale.

Permalink Reply by Gwendolyn Harvey on April 27, 2010 at 3:07am

I thought that the liens have to be satisfied by the seller before the bank would approve the short sale. Tax liens are personal debts and so I thought the banks would not pay them off. Is that not true?.

Karyl Moore said:

I had a short sale with Wells Fargo last year where they paid a $6000 Federal tax lien. It was a $180,000 sale.

Permalink Reply by Karyl Moore on April 27, 2010 at 4:22am

I guess it's up to the lender and probably depends, at least partly, on how much they receive from the sale. We received close to market price on this property because there was a bidding war.

Permalink Reply by Bryant Tutas on April 27, 2010 at 5:25am

Gwendolyn. Liens on a property always have to be removed at time of closing. A lien may or may not need to be paid to be removed.. An IRS tax lien can usually be removed form the property so the sale can take place. Either the seller of their representative will need to contact the IRS to discuss this.

The short sale lender may very well agree to pay off a lien so the deal can close. It will depend on their investor's guidelines AND the purchase price compared to the fair market value of the property. The stronger a deal is the better chance you have of having these types of issues taken care of.

Permalink Reply by Gwendolyn Harvey on April 27, 2010 at 12:40pm

I really appreciate the feedback. However, when you have a seller that doesn't try to get the tax liens resolved in a timely manner once notified, it makes my job harder in getting a short sale approved by the bank. So, I have decided to withdraw the listing.

Permalink Reply by Lydia on December 28, 2011 at 8:00am

From what I've found out you need to ask the Fed for a release of lien.  That would be Form 14135 "Application for Certificate of Discharge of Property from Federal Tax Lien".  You will also more than likely need form 8821 "Tax Information Authorization" which give you 3rd party auth.

As for the state liens I am not sure and am investigating that.

Lydia

Permalink Reply by Lydia on December 30, 2011 at 5:25am

So part 2 of my response re State Tax Liens...if you are in California you need to have the approval letters 1st, once you have those you need to request a partial release of lien and subordination of lien AND include the approval letter in your package. 

Here is the link, https://www.ftb.ca.gov/individuals/liens/rlslien.shtml

They do not give 3rd party authorizations to agents so you need to touch base with your escrow officer to track the package with the state. Here is the link re escrow instructions, https://www.ftb.ca.gov/individuals/liens/title_escrow_companies.shtml

One thing to be aware of is that the State MUST have an appraisal either from the lender or the buyer. In california the entire package needs to be sent either via fedex or UPS (overnight) and then once it is received it is assigned to a rep who will review the package, there after it will take approximately 21 days to get the release so if your approval letter has a COE date you should ask for an extension.

Good luck!

Lydia

Permalink Reply by Lydia on December 30, 2011 at 5:42am

Great!

Permalink Reply by Matthew Krause on June 13, 2012 at 4:18am

We have been successful in getting the discharges of the Irs Tax Liens so the short sale can go through!

Learn more here

Permalink Reply by Lydia on June 13, 2012 at 4:29am

Once you know what docs to submit it will be no problem. I get tax liens (state and fed) released with ease.

Permalink Reply by Carmine R Biello Jr on July 15, 2012 at 7:57am

Depends on the State. Although it is a Federal lien. certain states such as Illinois foreclosure will remove those liens. I am working on a case now involving State Dept of Revenie liens and Federal tax liens (9 in all) in a shortsale. In my case, I have negotiated to have them lifted from the property - all 9 and two additional mortgages.

 

Best of Luck!

 

Carmine

 

Permalink Reply by Joyce Hathaway on September 14, 2012 at 4:01am

I had a Federal Tax Lein released last year had to have an independent appraisal and a form form the IRS and release it the lein for the sale of the property.  Seller can not make any monies and in a short sale they don't easy....Joyce

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