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[ Follow Ups ] [ Post Followup ] [ The Forum Board ] [ FAQ ] Re: ward does irs ror apply in nc Posted by Ward-CA- on November 11, 2001 at 10:52 AM In Reply to: ward does irs ror apply in nc posted by michael on November 10, 2001 at 12:52 AM : does the 120 day ROR apply in NC also? i have always stayed away from irs leaned county tax fc and regular fc because i thought that as the new owner i could be liable for the liens. : but i read your discussion with someone that if the irs executes ROR will refund your bid money. is this right and is there any way i could be made liable for the leins? : thanks for all your replies to us folks you are helping us build our futures. BIG thanks. =•=•=•=•=•=•=•=•=•=•=•= Michael, since IRS is part of the federal government, it’s rules and regulations apply the same to all states. However, in some locales the local authorities will exempt certain junior liens from being wiped off the title of a parcel subject to a local tax auction. In some places that includes an exemption for an IRS lien, whereas in other areas it does not. County property taxes are almost always the most senior lien against a property. Thus logic dictates that a county tax auction will wipe off the title of a property all other liens and interests, and generally that’s the case. But, many counties don’t want their property tax sale to wipe out other county liens that might be recorded against the same property. For example, liens for delinquent child support payments or a county abatement lien, etc. So it’s imperative that you read you local laws for the liens that are exempt from extinguishment by the foreclosure of a senior property tax lien. The most direct approach to determine which liens will remain after a property tax auction is to inquire at your local tax collector’s office. They know who is or isn’t impacted by their sales. As far as a regular foreclosure is concerned, priority rules supreme. In that arena an IRS lien’s priority is established by the order of its recording in the county recorder’s office. In most cases, an IRS lien is quite junior in its priority. Thus the foreclosure auction of a senior mortgage or trust deed will wipe off a property’s title, all liens and interests that are subordinate in priority, to the foreclosing lien, including IRS liens. However, if IRS’s lien is wiped off in a foreclosure auction it can redeem the property’s title for 120 days after the foreclosure sale. To do so it must reimburse the foreclosure buyer the amount of their winning bid plus 6% interest on that sum for the 120 day period, plus any payments the foreclosure buyer made towards senior liens, property taxes, and insurance before IRS exercised it’s Right of Redemption. The only way a winning bidder at a foreclosure sale can be required to pay for an IRS lien of the previous home owner is if such a lien wasn’t wiped off by the foreclosure sale. That could happen if the IRS lien had a higher recorded priority than the foreclosing lien, or in the instance where IRS wasn’t properly noticed, by the foreclosure processor, that their junior lien was subject to being wiped off the title of the property by the impending foreclosure action. In both instances the IRS lien would survive the cathartic action of the foreclosure sale and remain on the title of the property after said sale. In the instance where IRS wasn’t properly noticed of the impending foreclosure sale, and thus its lien remains on title regardless of the foreclosure sale, the winning bidder would have redress against the bumbling forecloser for the amount of said lien. Follow Ups: Post a Followup: Name : E-Mail : Subject : Comments: : : does the 120 day ROR apply in NC also? i have always stayed away from irs leaned county tax fc and regular fc because i thought that as the new owner i could be liable for the liens. : : but i read your discussion with someone that if the irs executes ROR will refund your bid money. is this right and is there any way i could be made liable for the leins? : : thanks for all your replies to us folks you are helping us build our futures. BIG thanks. : =•=•=•=•=•=•=•=•=•=•=•= : Michael, since IRS is part of the federal government, it’s rules and regulations apply the same to all states. However, in some locales the local authorities will exempt certain junior liens from being wiped off the title of a parcel subject to a local tax auction. In some places that includes an exemption for an IRS lien, whereas in other areas it does not. : County property taxes are almost always the most senior lien against a property. Thus logic dictates that a county tax auction will wipe off the title of a property all other liens and interests, and generally that’s the case. : But, many counties don’t want their property tax sale to wipe out other county liens that might be recorded against the same property. For example, liens for delinquent child support payments or a county abatement lien, etc. So it’s imperative that you read you local laws for the liens that are exempt from extinguishment by the foreclosure of a senior property tax lien. : The most direct approach to determine which liens will remain after a property tax auction is to inquire at your local tax collector’s office. They know who is or isn’t impacted by their sales. : As far as a regular foreclosure is concerned, priority rules supreme. In that arena an IRS lien’s priority is established by the order of its recording in the county recorder’s office. : In most cases, an IRS lien is quite junior in its priority. Thus the foreclosure auction of a senior mortgage or trust deed will wipe off a property’s title, all liens and interests that are subordinate in priority, to the foreclosing lien, including IRS liens. : However, if IRS’s lien is wiped off in a foreclosure auction it can redeem the property’s title for 120 days after the foreclosure sale. To do so it must reimburse the foreclosure buyer the amount of their winning bid plus 6% interest on that sum for the 120 day period, plus any payments the foreclosure buyer made towards senior liens, property taxes, and insurance before IRS exercised it’s Right of Redemption. : The only way a winning bidder at a foreclosure sale can be required to pay for an IRS lien of the previous home owner is if such a lien wasn’t wiped off by the foreclosure sale. : That could happen if the IRS lien had a higher recorded priority than the foreclosing lien, or in the instance where IRS wasn’t properly noticed, by the foreclosure processor, that their junior lien was subject to being wiped off the title of the property by the impending foreclosure action. : In both instances the IRS lien would survive the cathartic action of the foreclosure sale and remain on the title of the property after said sale. : In the instance where IRS wasn’t properly noticed of the impending foreclosure sale, and thus its lien remains on title regardless of the foreclosure sale, the winning bidder would have redress against the bumbling forecloser for the amount of said lien. 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