deed in lieu with a lien

jmlakey · Joined: 20 Jan 2008 Posts: 1 1.60 Dollars($)

Hello,
We have a house that has started down the foreclosure road. We havent been served actual papers yet though. We have a lien on the house from the IRS for back taxes. Will the bank still accept an offer for a "deed in lieu" with a lien in place. If not, what are our other options? We just want out of this house!!!!!

jameshogg · Posted: Sun Jan 20, 2008 10:14 pm Post subject: deed in lieu and IRS tax lien

No, I don't think the bank will accept a deed in lieu when there's already a lien due to the back taxes. You will have to clear the lien or else when the IRS comes to know of the sale of your home, they might ask for the dues and rightfully so, because the IRS lien would have higher priorty than the mortgage lien. Have you thought of paying off the back taxes by the way?

0.10 Dollars($)

Ok...we had a payment plan with the IRS but we fell behind on those payments and that was when they placed the lein. My husband is in construction of new homes and hasnt stayed as busy as normal. Our monthly income is 1/2 of what it used to be.

larry · Joined: 27 Jun 2007 Posts: 3328 473.40 Dollars($)

Hi jmlakey,

Welcome to the forum.

I think you should first try to pay off the IRS lien as James has also mentioned that “the IRS lien would have higher priority than the mortgage lien". You can't simply avoid it.

Thanks,
Larry

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