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ScottyMacESQ
ScottyMacESQ, Lawyer
Category: Real Estate Law
Satisfied Customers: 15761
Experience:  Licensed General Practice Attorney, Texas
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I hold a third mortgage on a residence in Salt Lake County,

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I hold a third mortgage on a residence in Salt Lake County, Utah which is in default. I have filed Notice of Default and will soon advertise for foreclosure auction sale. There is a $100,000 IRS lien, which is ahead of me, against the owner of the property. The owner appears to be up-to-date on the 1st and 2nd mortgage. My questions are as follows:
1. Must I disclose in the advertisement that the new buyer will inherit the IRS lien?
2. If I take title of the property, must I satisfy the IRS lien at title closing?
3. What are my options with the IRS if the lien just continues to run with the title thereafter? Is it ever possible to negotiate a settlement with the IRS in such case?
If and when I actually suffer a financial loss on this IRS lien, can I then personally sue the previously foreclosed owner to recover those losses?
4. Can you recommend a Utah attorney who might represent me in any negotiation with the IRS?

ScottyMacESQ :

Thank you for using JustAnswer. I am researching your issue and will respond shortly.

ScottyMacESQ :

1. Must I disclose in the advertisement that the new buyer will inherit the IRS lien? - In a foreclosure, no. Foreclosures are "caveat emptor", meaning that anyone bidding has the burden of doing a title search and will inherit any liens that survive the foreclosure. There is no requirement that you disclose them.

ScottyMacESQ :

2. If I take title of the property, must I satisfy the IRS lien at title closing? - No. Since the IRS lien survives the foreclosure, it will continue to run with the property. You don't have to satisfy it, but if you don't want the IRS to foreclose, you will eventually have to satisfy it.

ScottyMacESQ :

3. What are my options with the IRS if the lien just continues to run with the title thereafter? Is it ever possible to negotiate a settlement with the IRS in such case? If and when I actually suffer a financial loss on this IRS lien, can I then personally sue the previously foreclosed owner to recover those losses? - You can negotiate with the IRS, but it's impossible to say whether or not they would be agreeable to such a situation. If you suffer any loss on this lien (such as if the property is foreclosed) you would not be able to sue anyone, because you voluntarily took on that risk. There's no contract that you would be paid for any loss that you incur, etc... It's really a risk that you would undertake with the hope that you would come out on top.

ScottyMacESQ :

4. Can you recommend a Utah attorney who might represent me in any negotiation with the IRS? - We can't make any specific recommendations per the terms of service of this site, but I would suggest going to www.superlawyers.com or www.bbb.org to find lawyers / companies that handle IRS debt negotiations.

ScottyMacESQ :

Both of those sites are good places to find reputable attorneys that handle this kind of situation.

ScottyMacESQ :

Hope that clears things up a bit. If you have any other questions, please let me know. If not, and you have not yet, please rate my answer AND press the "submit" button, if applicable. Please note that I don't get any credit for my answer unless and until you rate it a 3, 4, 5 (good or better). Thank you, XXXXX XXXXX luck to you!'

ScottyMacESQ :

Did you have any other questions before you rate this answer?

Customer:

Thank you. You've answered my questions to my satisfaction. Would you please send me this dialogue in a printable form. like an email?.

ScottyMacESQ :

Unfortunately I cannot send any emails (per JustAnswer terms of service which require that we only use the site for contact with customers) but once you rate this question, it will switch to Q&A mode (you may have to refresh the page to see the change) at which point you can print out that page.

Customer:

Yes: Just one more question. I know the sizes of the original two mortgages ahead of me from the title search but I have no idea how much has already been paid down. How can I get that information from the banks holding those mortgages? This is due dilligence that I need before deciding weather to go ahead with the foreclosure.

ScottyMacESQ :

I understand. Since that information is not public domain information, the only sure way to get it would be to seek payoff information from the mortgage holders, but often they don't give out this information, or even return your call. Much of the time investors that I know will have to make a rough calculation based upon the amount financed per the public records, minus the amount paid per the note. Again, this is only a rough estimate, if they don't give it to you voluntarily.

ScottyMacESQ :

Hope that clears things up a bit. If there's nothing else, please rate this answer. Please note that I don't get any credit for the time and effort that I spent on this answer unless and until you rate it a 3, 4, 5 (good or better). If you feel that I have gone above and beyond in this answer (my average answer is about 10 minutes) bonuses are greatly appreciated. Thank you, XXXXX XXXXX luck to you!

ScottyMacESQ :

Did you have any other questions before you rate this answer?

ScottyMacESQ :

Should I continue to await your response, or may I assist the other customers that are waiting?

ScottyMacESQ and 7 other Real Estate Law Specialists are ready to help you
Customer: replied 3 years ago.

Thank you. That is all I need to know.

My pleasure, and again, good luck to you!

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