We've seen a few deals come by where an IRS tax lien showed up during our due diligence. Our mortgage friend, Ron Hall, from BNC National Bank just sent us this article that explores this subject. If you have more questions, give Ron a call at 623-293-6970 or pop him an email at rhall@bncnationalbank.com. Here is what Ron has to say:
Many home buyers and real estate professionals find out they are dealing with a tax lien and assume that this buyer is done and move on to the next client.
I am here to tell you that is a HUGE mistake. In FHA lending the rule of thumb is that if the collection can affect title it has to be paid off, well that’s a guideline not a rule.
A couple of things come into play that most people are not aware of: First, is there a payment arrangement? In this case can you show that you have set up a payment plan with the IRS and have made those payments in a timely manner? The gold standard here is 12 months of canceled checks as proof. If the answer to that is yes the second and very little known tool is… Will the IRS subordinate the lien to the mortgage? We’ll most of the time that answer is YES. Think about it for a minute, you owe the tax guy some money, you want to buy a home, so you ask the IRS to subordinate the lien so that you can accumulate an asset that they can collect against in the future if you default. Is there really a downside for them?
Hope this info helps provide some options and clarity to those who face buying a home with an IRS tax lien.
Gene Urban
www.UrbanTeamAz.com
602-234-5777
Information is deemed accurate but not guaranteed.
