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IRS lien holding up short sale

Posted by Danielle on May 6, 2014 at 3:23pm in Short Sale Discussions
Hi everyone, I'm curious as to how long it usually takes to successfully remove an IRS lien from a short sale property. We're 7 months in to this purchase and BofA gave verbal aporoval on 4/10. They're ready to issue the approval letter, but will not do so until the 30,000 lien is discharged from the property. The listing agent said the IRS contacted her 2 days after she reached out to them, and she submitted all the required documents the week of 4/14. This has been a long process so far and we're extremely anxious to close. Any info/experience is greatly appreciated! Thanks for reading!

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Replies

  • Danielle May 9, 2014 at 6:11am
    Thanks for the info! From what I understand the IRS made contact with the listing agent at the beginning of the process. I've been told that everything has been submitted in full so I'm sure that BofA sent what was needed to the selling agent in order to get this moving. I'm assuming we'll get word next week....hopefully!!!
  • Danielle May 8, 2014 at 1:29pm
    Just received an update.... The title company says it can take up to 2 months to receive the lien release. They, nor the listing agent, nor the home owner have been able make any contact with the IRS regarding the status of the application. Its been 3.5 weeks and I really hope the lien is removed next week, rather than next month. This is also an FHA short sale, and the ATP expires at the end of June....not sure what problems this will cause if we haven't closed by then......has anyone had to wait the full 2 months for the lien release?
    • Jonathan Katz > Danielle May 8, 2014 at 4:24pm

      It "can" take up to two months, but that would be on the extremely long end. This may occur if a package was incomplete and additional items had to keep being requested. I received an IRS discharge of lien the other day and it look less than a week to receive it.The IRS package was sent overnight 4/30/2014 and we received the IRS discharge of lien on 5/6/2014. They don't always go this fast, but typically should take an Est. 30 days.  If they haven't heard about the application they should probably give them a call.

      Also, It makes little sense why BOA is requesting a discharge of lien prior to issuing an approval. I've yet to see BOA take a stance like this. The IRS is likely going to need the short sale approval prior to reviewing the IRS lien for discharge as this is one of the required items.

  • Jonathan Katz May 7, 2014 at 8:14am

    Danielle,

          If the package is completed properly and has all needed items, it can be reviewed very quickly in some cases. The fastest I've received a discharge is in less than a week, but sometimes it does take up around 30 days. Escalate with BOA, you won't be able to have your IRS package fully reviewed without approval letters from all lien holders. I've yet to see BOA state that they won't approve a transaction until an IRS lien is discharged.

    Brett@ishortsalenow.com

    310-564-6389

    www.ishortsalenow.com

    • Danielle > Jonathan Katz May 7, 2014 at 11:40am
      Lord almighty....I'm relaying the info my agent gave me, which is the info the listing agent gave him. I sure hope this package was submitted in full and that the IRS has everything they need. I wish there was a way to know for certain. This wait is difficult but will be worth it the day we finally close!
    • Danielle > Jonathan Katz May 7, 2014 at 8:50am
      I sure hope the selling agent has the know how! I have no other choice but to trust her on this. We're inching up to a month since the packet was sent in, so I'm hoping for good news literally any day (or minute). Thanks again!
    • Danielle > Jonathan Katz May 7, 2014 at 8:32am
      Thank you so much Brett. From what I understand, BofA also submitted documents to the IRS. So hopefully they have everything they need!
      • Jonathan Katz > Danielle May 7, 2014 at 8:35am

        I've yet to see a mortgage servicer assist in submitting documents to the IRS for a review of discharge of lien. This is something typically someone on the homeowners side needs to take care of. The concern always is,does the agent or the parties participating know how to properly complete and submit a package to the IRS in an adequate time frame.

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