Alright all you mortgage pros out there I have a rather simple question for a very complicated situation I find myself in here.
I am currently in the process of trying to have a tax lien removed from my credit report. This tax lien is from a property that my wife and I surrendered during our chapter 7 bankruptcy we had to file 5 years ago. Because of some crazy loop-hole my name is still showing on the title due to the fact that our old mortgage company went bankrupt themselves and never foreclosed on the property. I have already contacted an attorney about getting this fixed and it appears it is going to be a long drawn out process.
Meanwhile we are getting ready to purchase the home we currently rent and I am greatly concerned about this tax lien showing on my credit. I had my credit score around 700 but now it is down to the low 600's due to the tax lien. I have all of the documentation that I need to support my claim that the taxes on this property are no longer my responsibility including a letter from my attorney supporting my claim.
Are there any mortgage lenders out there whose underwriters would take this into consideration when decisioning my application for a home loan?
Thanks in advance to anyone who can offer me some advice about this. _________________ Scott McKay
DiYCreditGuide.com
If the property has never been foreclosed and you are still on the title of the property then I think you should talk with your previous lender regarding this. I you are still the owner of the property as the property has not been foreclosed and you are still on the title.
BTw you may get approved for a loan if you have good income. I would suggest you to seek No-obligation free consultation from the community lenders. If the criteria match with your profile then they will contact with directly.
Hope this helps. Feel free to ask if you have any further questions.
You can go for an FHA loan and get ready to get all the proof to them along with some letters of explanation. But the simple truth is if you have a debt to the government until that is resolved no lender will take you. So if you have enough solid proof then you can try and get a loan and if not then wait till this is resolved. _________________ Eugene Volovik
Branch Manager
Team USA Mortgage
612-481-3127
Conventional, FHA and Commercial Lending
Sorry to hear about this unfortunate mistake on your credit. I need a little more background to advise it sound like the mortgage professionals have given you solid answers on the mortgage side.
When did the lien show up on your credit?
What are you currently doing to work on your credit?
This will better help me understand what you can do to improve your credit situation. _________________ Cliff Pape
Market Analyst
www.home-buddies.com
Posted: Mon Jul 14, 2008 3:53 am Post subject: RE: removing tax lien from credit report
Hi Scott,
When a property is foreclosed, the lender or the property owner has to pay the back taxes after the sale and get rid of any tax lien. At times, a tax lien sale is held where the lien is offered to investors at a public suction. The purchaser of the foreclosed property has to wait for some time known as redemption period during which property owner must pay off the tax dues with interest and thus remove the lien.
In some states the lender has to pay the back taxes in order to protect his interest in the property. And once the redemption period is over, the lender can initiate the foreclosure proceedings. The foreclosure will result either in acquiring the title or a tax deed sale of the property where the lender has the right to bid first. The lender can also make additional bids if required.
Considering your situation, I feel you should pay off the back taxes and clear the property from the tax lien. I understand that the property hasn't been actually foreclosed because the lender himself is bankrupt. But as because it's a government lien, the best thing is to pay it off, let the credit bureaus know about the payoff so that you get a clean credit report.
What I know from this point is that at the time I filed for bankruptcy the law stated that we surrenderred all legal responsability to the property. I have all of the proof I need to support this. If the bank did not take back the property at that time then the property should have been handed over to the estate created by the chapter 7 bankruptcy.
Cliff, the tax lien did not show up on my credit until just last november, for property taxes owed for the year of 2006. Our bankruptcy was discharged in April of 2005. I have already filed disputes with all three of the credit bureaus providing them with copies of my bank. docs. and my letter from my atty. They still won't budge! My new atty believes he will be able to correct this for me but it may take up to 9 months. I can beg and plead with the current home owners to see if they don't mind letting us rent a while longer but I was really hoping to buy soon, before housing values decrease any further.
BTW our D/I should be great. My wife just graduated nursing school and started working. I would say we gross around 70K and only have one car loan for around 10K and about 5K in credit card debt. _________________ Scott McKay
DiYCreditGuide.com
Are there any other recent derogatories on your credit report within the past two years? The reason I ask is because there may be a better “strategy” to improve your credit other than focusing on this one problem. _________________ Cliff Pape
Market Analyst
www.home-buddies.com
In all honestly cliff I don't think that I've had one derogotory mark on my credit since the bankruptcy was discharged in april 05'. I have a few credit cards that I have had open for over two years and I have a new auto loan from dec. of last year. Not much to really improve on. I vowed after my bankruptcy to never allow myself to get over-extended like that again. I've been into credit repair for over 4 years now and I'm just stuck on this one.
If you have any suggestions I'd greatly appreciate any advice but I just don't think theres much I can do to improve my credit score right now.
BTW, does anyone else get into this new Coldplay song? It keeps getting stuck in my head... _________________ Scott McKay
DiYCreditGuide.com
Has the property been sold since your bankruptcy. If so the tax lien should have been satisfied or the current owner would not have a first lien position. Although the tax lien is satisfied it will still show on your credit.
What is the problem? Credit Score due to Tax lien being reported? Or has the tax lien never been paid?
smckaybiz
