i have a home in foreclosure. i refinanced in 2009. prior to that i added two people to the title. one of them now has a tax lein against them. my question is does the tax lein attach it self to the property in foreclosure?
The Federal Tax Lien attaches all property and rights to property of the taxpayer named in the lien. If the subject lien is a Federal Tax Lien, and if the Notice of Federal Tax Lien was timely and properly recorded in the jurisdiction where the real property in foreclosure is located, the lien attaches the property. The affect of the foreclosure on the lien (and the lien on the foreclosure) depends on various things including, among others, the priority of the lien in regard to the foreclosed mortgage, and the equity in the property.
Doesn't the lien only attach to the liened taxpayer's equity in the property, which is junior to any mortgage?
Seth
Yes to the first part - I should have been more specific - attaches the liened taxpayer's interest in and to the property. Not always on the second part - lien is probably junior to the foreclosed mortgage, but I've seen title searches miss or ignore perfected liens which remain superior to subsequent mortgages and conveyances. Even if the FTL is junior, the government will have redemption rights after foreclosure - not often exercised due to lack of equity, but still a consideration.
BeanSmart website is not affiliated with any of the manufacturers or service providers discussed here. All logos and trade names are the property of their respective owners.