Hello to all my Quatloosians!!

[gottago]

Back once again (like a bad rash, never goes away) to report we now have a new revenue officer and taxpayer advocate assigned to us and once again in the crosshairs. Saw the light in 2006 and have cooperated fully and filed and paid in full since 2006. However, it seems we can no longer be "currently not collectible" if there is equity in my house. Bought it in 2004, have been turned down by Chase and a local mortgage company for a cash out refinance because I no longer make the money I did back then and have "derogatory filings (aka NOFTLs)" against me. 100% current on mortgage for 7 years. Look for our home soon (jj has the address I am sure) on the irs auction site and I would really appreciate anyone who knows a honest, reputable tax attorney or enrolled agent in central Texas that could help us avoid becoming homeless to give me the information about them....really.

[Number Six]

Here's a list of tax professionals that might be of help: http://taxhelponline.com/tax-help-now/a ... e/107.html

I'm sure there are pros here who will make good recommendations.

[The Observer]

7 years of payments, in a declining real estate market, and you have managed to create enough equity to make the IRS interested enough to go to court and sue for sale of the home? That is remarkable. Is the real estate market in central Texas on the rebound ahead of the rest of the country?

The reason I ask this is that typically the IRS will reduce the the fair market value of the home by 35-40%, depending on the circumstances and quality of the property. That reduction is taken prior to subtracting any priority creditors over the federal tax lien. As a rough example say a home has been appraised by the IRS at $200,000. The reductions by the IRS will lead to a new value of roughly $120,000. Then say that the first trust deed, a senior creditor over the lien, is owed $100,000, then the final minimum bid is $20,000. If the mortgage was instead at $140,000, the minimum bid would be below zero and the IRS would not seek to sell the home.

The point of all this is if there is sizable equity in the real estate, then the IRS is likely pursue sale. If there is a marginal equity position, then the likelihood of the property selling at an IRS auction is nil. Most people pursuing properties at an IRS sale are looking for deals, especially if they can flip the property quickly and make a profit.

Finally, even if the home goes to sale, per the IRC, you have 6 months to redeem the home back from the successful bidder by paying them the bid price plus the interest on that amount of money for the time they held the property. So if there is a very low minimum bid, you may have a very good chance of borrowing money from family and friends to get the property back. However, the problem remains with the tax lien - if it isn't satisfied by the proceeds realized at the auction, it will simply reattach to the property and you will have the same problem all over again.

[gottago]

I paid 20% down in 2004 and got a 15 year mortgage in 2004. Currently own $70K on a house that (county we live in) appraises at $167K. Realistically, in this market and the condition of the property (lightining strike and backyard fire) it might bring $130K. , probably less at auction. That is still $60K and I would gladly sell it and give the proceeds to the g if that would put an end to it but, as you stated, the liens sill remain. What would you suggest?

[Famspear]

Dear gottago --

I just sent you a private message; please check.

Yours,
Famspear
11:27 pm
Tuesday, Oct 4, 2011

[The Observer]

With the higher FMV of the home, a rough estimate of the minimum bid will come in around $96,000. That could put off bidders and cause the sale to be cancelled due to no interest. But again, it depends on what a bidder believes is possible in remarketing the property.

At the lower end of the value, the minimum bid would probably set at the $13K mark, making the property aboslutely more attractive in terms to bidders. Remember, the successful bidder still needs to deal with senior lienors on the property, since their interest is still valid; all the IRS did was sell their interest in the property.

Obviously, it is in your interest to ensure that the IRS sets a FMV for the property as high as reasonably possible. In doing so, it could discourage bidders. But even if the property sells, it would mean more of your tax bill will be paid off - it could even full pay the tax liability if there was enough interest in the property.

The IRS is required to notify you of the minimum bid amount and give you 10 days to appeal the mininum bid amount if you disagree with it. If the IRS does not agree to revise the bid, you will have to secure an independent appraisal to contest the amount.

...but, as you stated, the liens sill remain. What would you suggest?

If you owe more than the $60,000 amount you think you could secure from the sale or re-finance of the home, then I don't have anything else to suggest. I am not a lawyer and I am merely advising about what the IRS is likely to do and their procedures. It appears you are getting private messages from the legal eagles here at Quatloos and you should take due consideration on any advisement they give about what you could do. I imagine that there are options such as bankruptcy that could come into consideration, but that it beyond my experience and it would depend greatly on your personal circumstances as to whether it would be effective. I have seen too many situations where people rushed into bankruptcy , only to find that that they made their situation worse rather than better by filing.

The best suggestion would be for you to secure refinancing that would allow the equity in the property to be applied to the tax liability through an application for subordination of the federal tax lien. The IRS would rather do this than go through the expense of a suit to foreclose on the home and a judicial sale. The subordination would also not require full payment of the liability, only that the IRS receives the equity amount less any necessary and usual expenses to pay for the loan.

It would also allow you to keep your home and the IRS would have no further interest in the home (unless the equity position tremendously increased). But you say you cannot secure refinancing and I am sure you know better than I about your ability to secure that. I would offer that perhaps you haven't exhausted all the possibilities of securing financing and that there may be lenders who would refinance, even though it might be for a higher interest rate or terms that you would normally not consider.

Wishing you good luck in dealing with this.

[gottago]

Thanks Famspear but for some reason I am not authorised to receive or send private messages on here. If possible, could you please send the information to my email address in my profile.
Thank you.

[Famspear]

Thanks Famspear but for some reason I am not authorised to receive or send private messages on here. If possible, could you please send the information to my email address in my profile.
Thank you.

Hmmm.... for whatever reason, I can't see your email address. If you like, send an email to me at:

lawfulman [at] gmail [dot] com

and I'll respond.....

[webhick]

Demo fixed gottago's permissions. Should be able to send/receive PMs now.

[Kestrel]

I would offer that perhaps you haven't exhausted all the possibilities of securing financing and that there may be lenders who would refinance, even though it might be for a higher interest rate or terms that you would normally not consider.

Wishing you good luck in dealing with this.

I see a lot of bankruptcy cases at my job, and can suggest the names of some mortgage lenders which work with distressed homeowners. Chapter 13 Bankruptcy (the 5-year plan) also may be an option worth considering; it could prevent your home from being sold, and allow you to keep your mortgage and car payments current while paying the IRS under better payment terms than an IRS wage levy.

I'm aware that some of these mortgage companies may be involved in current litigation regarding title transfers to servicing companies, so I'm not going to recommend "go to" or "avoid" on any of these. Someone else may want to express an opinion on that.

The list includes:

American Home Mortgage
Beneficial Mortgage
CitiFinancial Mortgage
CitiMortgage
Countrywide Home Loans
EMC Mortgage
Everhome Mortgage
MIdland Mortgage
MorEquity
NationStar Mortgage
Vanderbilt Mortgage & Finance
Wells Fargo Home Mortgage

Finally, you might find out if a local Credit Union would give you a home equity loan.

Good luck.

[Imalawman]

First, keep in mind that the IRS hates having to force a sale of home. Secondly, it is not very easy for the IRS to force a sale of a home. In all likelihood, you should be able to get into a payment plan. A good tax attorney should be able to avoid the sale of a home. I've never had the IRS force the sale of a home for one of my clients. (knock on wood)

So, you can relax about being homeless, but do get a good tax adviser who can help you - the sooner the better.

Best of luck!

[Famspear]

Demo fixed gottago's permissions. Should be able to send/receive PMs now.

Thanks, webhick!

And good luck to gottago!

[gottago]

Thanks webhick and demo for fixing that. And, thanks again to famspear for your help.

[Famspear]

Thanks webhick and demo for fixing that. And, thanks again to famspear for your help.

You're welcome, and thanks to webhick and demo!

[Gregg]

Demo fixed gottago's permissions. Should be able to send/receive PMs now.

And no more bitchin 'bout the Illuminati, you're one of us now.

[gottago]

Spent about 2 hours today at the bank that has my mortgage and they have (potentially) agreed to a cash out refinance for a portion of the house equity (turned me down twice before online but I found a sympathetic loan officer). This will not be enough to pay off all the liens but represents all I can do. I want to do another OIC but fear it will be rejected immediately because I do not have 20% of the amount of the offer--I do think it will net more $$ for them than foreclosure--sitting vacant--auction. I did get the loan officer to give me a prequalification letter.

Really do not have the ability to hire anyone to assist me so any advice or just steering me toward the answer will be appreciated.

[The Observer]

I want to do another OIC but fear it will be rejected immediately because I do not have 20% of the amount of the offer...

The alternative is to pay the offer amount in installments, thus avoiding the 20% deposit requirement. I am assuming that you want to offer the proceeds from the refi as the offer amount. If that is the case, the IRS will most likely not accept it (regardless of whether you have the 20% up front) since it represents monies that the IRS can already collect. My own thought would be to apply for a subordination of the lien against the property so that the loan can go through and the IRS receives the proceeds. Then submit an offer based on your ability to pay your offer amount over time; the IRS will have to consider your new financial situation, which will include a house with less equity than before and your leftover income. That might result in more favorable offer terms for you. Of course, not knowing the specifics of your financal situation means that the above isn't a guaranteed answer.