What happens if there is a federal IRS tax lien on the property?
Municipal tax liens have priority over federal IRS tax liens, so the foreclosure proceeding will eliminate the IRS lien. However, any time that the federal government holds an interest in the property, a sheriff’s sale must be scheduled at the end of the foreclosure proceedings. • What happens if the FDIC (Federal Depository Insurance Corporation) holds a mortgage on the property? Municipal tax liens have priority over all types of mortgages. However, written consent must be obtained before foreclosure can be completed against the FDIC where it holds a mortgage on the subject property. In our experience, such ‘consent’ is never denied, but it always causes delay and sometimes results in a redemption by the FDIC. Experienced tax lien attorneys have the appropriate forms and contact information. • What risks do lien investors face? Some of the risks include Bankruptcy delays; Damage or destruction of the property; Environmental contamination; Valuation of the underlying property; Foreclo
