Florida Foreclosures - Proven Tips For Tackling Stubborn Liens
Helping homeowners avoid foreclosure just got more challenging.
Increasingly, more homeowners must settle IRS tax liens before getting permission to short sale & avoid foreclosure.
Truth is, negotiating IRS tax liens is unpredictable and s-l-o-w.
PLEASE dont hold your breath when your short sale depends on negotiating an IRS tax lien. If possible, avoid IRS liens. I'll take HOA liens or second mortgages charged off to NCO Collections any day of the week over an IRS lien.
To be clear, you must satisfy the IRS tax lien before you can close an approved short sale. Reality is, the IRS seldom approves without receiving money before signing off to release the lien.
First, whoever is negotiating your short sale, he/she quickly must provide authorization to IRS to negotiate lien release with the IRS.
Keep in mind, the IRS almost always wants/needs the full short sale packet to see the estimated HUD in order to review all closing costs, mortgage pay-offs, and other costs associated with the deal. Further, IRS often insists on seeing approvals from any other lien holders first, which usually delays any short sale. In some cases, this delay can be 30-60 days AFTER your mortgage debt owners already have approved your short sale.
By the time the IRS responds with what it will accept to satisfy the lien, the short sale approval letters typically have expired and your realtor, short sale negotiator or attorney will have to seek extension from the mortgage debt owners. Naturally, debt owners and their servicers don't like to extend closing, sometimes demanding a per diem for each day closing is delayed.
If you face an IRS tax lien while trying to short sell your house to avoid foreclosure, I recommend the following:
Contact the IRS early in short sale process, confirming what IRS needs to satisfy lien and how long it will take. I'm sure it varies case by case, client by client.
Prepare your financials, including but not limited to income/expense statement; pay stubs; bank statements; tax returns.
Be prepared to submit more than one time, as the IRS and debt owners will find a way to lose or misplace some or all of your paperwork. Don't get angry; just re-submit whatever paperwork they don't have. Forget pointing fingers. It does no good. Please believe me on this one. I have lost my cool several timesand nothing productive came of it.
Stay on top of your request. You have to call them to keep your file from slipping through the cracks.
Keep detailed notes. Note on what day you submitted the file, with whom you talked; what he/she said, etc. Keep accurate records.
Please understand the success of IRS lien settlement depends on HOW MUCH LOSS youre asking the IRS to accept.
No doubt, a one-mortgage short sale is challenging enough. Add a 2nd mortgage, an IRS tax lien, a County code enforcement lien and/or an HOA lien and the challenges mount. It's important to STOP more Sarasota foreclosures resulting from unsettled IRS tax liens. Please contact Sarasota Real Estate Mike Payne for more information about resolving an IRS tax lien *before* you lose your house to foreclosure.
