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Can a mortgage company foreclose on a property which has a federal lien on it? Which overrules which? Federal vs mortgage company?

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Federal is more powerfull and I dont think that mortgage company can foreclose a property that has a federal lein.

larry · Joined: 27 Jun 2007 Posts: 3322 474.67 Dollars($)

Hi Dolly,

Once the notice of Federal tax lien is filed against a property, it takes priority over everything except a few other interests in the taxpayer's property. But the lien itself cannot transfer the property to the IRS. The transfer is done through a judicial foreclosure of that lien.

So I feel, apart from the Federal government, no private mortgage company has the right to foreclose on that property which has already a Federal tax lien against it.

blue · Posted: Thu Sep 06, 2007 5:50 pm Post subject:

Hi Dolly,

Welcome to Mortgagefit discussion board.

Any mortgage holder will not worry about losing priority to federal tax lien.

If the mortgage was recorded earlier to federal tax lien (FTL) & mortgage holder gives district director of IRS at least twenty five days advanced notice about foreclosure then foreclosure on the mortgaged property will terminate subordinate FTL.

This notice to district director of IRS is to be sent by certified or registered mail or delivered personally.

You can read more about this topic from this following page: http://recenter.tamu.edu/pdf/1110.pdf

Do let me know if you have any other questions.

Thanks
Blue

gmakerley · Posted: Sat Sep 27, 2008 10:01 am Post subject:

i took the junk out...now here's my take on it.

of course a lender can foreclose on a property on which there is a federal lien. and yes, a federal lien does take precedence over the mortgage; but that won't necessarily hamper the lender. it all depends on the dollars involved - if the lien is sufficiently small, the lender stands to retrieve all its money anyway.

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Federal Lien vs Mortgage Company Foreclosure