Posted by Verve on December 20, 2002 at 09:38:07:
Won’t your title company insure this transaction with those two liens as exclusions to the policy?
HELP! Need help with release of lien on title! - Posted by seanp.
Posted by seanp. on December 19, 2002 at 18:01:57:
I am currently trying to purchase a house with two types of liens on it via a short sale. The first is a personal tax lien of $17,000 and the other is second mortgage of $7,000(which is actually a private second mortagage which is held by the previous sellers of the property). The bank has agreed to sale the property to me if they can net $22,000, and I do not want to pay anymore for this house beyond that. I am trying to discover a way to have the leins released so that the title company will insure the property. For example maybe the title company can take a bond to insure the title in this particular situation???I am not sure. If anyone his any experience or ideas on how this can be accomplished please contact me ASAP.
Re: HELP! Need help with release of lien on title! - Posted by JT-IN
Posted by JT-IN on December 20, 2002 at 10:26:42:
Sean:
The IRS lien, if for personal 1040 taxes, is not that big of a deal to get IRS to release the real property from the lien. You will need an appraisal, a purchase contract and a HUD-1 statement showing that the owner is not profiting from the sale, much the same way for the short sale. Then IRS will usually release the lien provided that the property is selling within 20% of FMV appraisal. What helps this process is for IRS to somehow receive “something” as opposed to “nothing”, but this will not kill the deal either way.
The only way to get the 2nd mtg released is to negotiate to purchase at a discount, or short sale with the 2nd lien holder. This is very similar to that of negotiating with the 1st mtg.
Not sure of anyway for a Title Co to get a bond to cover known exposures. The purpose of the Title coverage is to cover unknown risks, but known risks are not risks, but circumstances that must be dealt with, and the above describes what must be done to clear the title and liens.
Wish you all the best on clearing up the matter.
JT-IN