Wednesday, December 17, 2008

Tax Liens and the mortgage crises

IRS officials are worried that struggling homeowners are not refinancing or mortgage modification because of tax liens.

Homeowners or their representatives and lenders can request a "discharge" of the claim if the home is being sold for less than the amount of the mortgage lien. The discharge does not relieve the debt and the tax payer still has the responsibilitly to pay the delinquent taxes. It merely removes the lien from a particular property such as a home so it can be sold

The IRS can can also subordinate the lien to a refinance loan.

The process to discharge or subordinate a tax lien usually takes about 30 days after submission of the completed application, but IRS officials say they are working to speed up that process.

For information about how to discharge or subordinate a federal tax lien, call the IRS at 800-913-6050 or visit their Web site at

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