refinance w/ tax leins in place

[blueman814]

What is the name of your state? Texas, Travis County
A refi on my home was performed in 2001. At the time of the refi there were 2 IRS leins registered on the home through the county. One was set in 1997 and the other in 2000. The refi went through but the leins were not satisfied so are still in place. Should not the lender or title company do a search for leins? Doesn't the title insurance have something to do with leins unsatisfied?
Does it nullify the refi or is someone other than I responsible for the leins?

 

[nextwife]

Were they paid off on the closing statement, but remain unsatisfied "of record", or were they just not paid at all?

The title search would have told the lender what was "in front" of their mortgage. If they were comfortable having their mortgage behind those liens, then, that was up to them. If you had liens against the place, they are up to you to pay off. If they were paid off, you need to get evidence and get after the state or fed tax lienholder to get a release done.

 

[seniorjudge]

What is the name of your state? Texas, Travis County
A refi on my home was performed in 2001. At the time of the refi there were 2 IRS leins registered on the home through the county. One was set in 1997 and the other in 2000. The refi went through but the leins were not satisfied so are still in place. Should not the lender or title company do a search for leins? Doesn't the title insurance have something to do with leins unsatisfied?
Does it nullify the refi or is someone other than I responsible for the leins?

Title insurance never protects you against your own liens that you knew about already. There mistake (if it is one) does not make it their debt.

The IRS actually subordinates its liens sometimes. This may have happened. It always amazes me when I see that.

Talk to the title company; they will clear up your questions.

 

[blueman814]

leins on home

Let me clarify:
wife works for RE Co. that has their own mortgage Co.. She preps for refi with her contacts, refi goes through, I sign 1/2 interest of the home she becomes sole owner of the note and other 1/2 owner. She files for divorce within a month of the refi. BTW, she got her green card 3 days prior to the refi. The refi was done in March of 2001. IRS lein I was placed on the home in May 1997, lein II in Dec. 2000. Regardless of what was "in front" or "subordinate" (not familiar with those terms) does not the IRS always get their money first? In other words, is it possible that somebody intentionally overlooked the leins in order for the refi to go through? Remember, these are her friends.
Also, I requested the refi documents from the Mort. Co. but they said I had to get permission from the ex since she's the note holder. What about me being half owner and having signed the refi documents?

 

[seniorjudge]

Let me clarify:
wife works for RE Co. that has their own mortgage Co.. She preps for refi with her contacts, refi goes through, I sign 1/2 interest of the home she becomes sole owner of the note and other 1/2 owner. She files for divorce within a month of the refi. BTW, she got her green card 3 days prior to the refi. The refi was done in March of 2001. IRS lein I was placed on the home in May 1997, lein II in Dec. 2000. Regardless of what was "in front" or "subordinate" (not familiar with those terms) does not the IRS always get their money first? In other words, is it possible that somebody intentionally overlooked the leins in order for the refi to go through? Remember, these are her friends.
Also, I requested the refi documents from the Mort. Co. but they said I had to get permission from the ex since she's the note holder. What about me being half owner and having signed the refi documents?

After I read your clarification, I am more confused than ever.

Are you saying your ex-wife loaned you money? "she becomes sole owner of the note"

In any event, based solely on what I think I am reading here, the IRS liens are still on the land (and, possibly, other assets) unless you paid them off.

 

[blueman814]

simple refi

Ok, sorry...I read it and I can see how you're confused. My wife and I refi'd my home. At the time there were 2 fed tax leins on the property. How is it possible for the refi to go through if the leins were not satisfied?

 

[seniorjudge]

...How is it possible for the refi to go through if the leins were not satisfied?...

I have no idea but I can tell you who has the answer: the lender.

 

[nextwife]

The question remanis:

Were they PAID OFF at closing (hint: look at the closing statement from that refi closing) but somehow NOT released in the public record (sometimes the satisfaction recordings somehow end up in the title company recording department or file and don't get recorded, or they arrived at the title compnay and were sent back for correction and get lost in the shuffle). If they were paid off but NOT released, it may be a simple matter of obtaining and recording a "duplicate original release".

or

Did the refi closing occur without the funds to payoff those liens being deducted and paid?

 

[blueman814]

refi closing

The refi closed and the leins were not paid off. It is my belief that the mortgage company never alerted the lender about the leins. Or they were, uh-hum, "overlooked" by "friends". I do know this...the house is up for sale and you can be darned sure the IRS will get their $$$$ before I get my share. I'm simply trying to determine how it was possible to sidestep an IRS lein on a given property unless there was some sort of manipulation involved.

 

[seniorjudge]

The refi closed and the leins were not paid off. It is my belief that the mortgage company never alerted the lender about the leins. Or they were, uh-hum, "overlooked" by "friends". I do know this...the house is up for sale and you can be darned sure the IRS will get their $$$$ before I get my share. I'm simply trying to determine how it was possible to sidestep an IRS lein on a given property unless there was some sort of manipulation involved.

It could've been a simple screw up by the title company. Sorry to spoil your conspiracy theory.

 

[nextwife]

Well, if you didn't borrow enough then to payoff the old mortage AND payoff those liens, then you still owe that. Didn't you look at what disbursements were being made when you did your last closing, didn't you review your closing statement? If you did not have the liens paid out, you still owe.

 

[Rhubarb297]

I don't understand the whole purpose for this thread. Whether the title company screwed up and didn't pay off the tax liens is irrelevant. They would have gotten the money from you to pay off those liens if they had paid them when the house was refinanced. They didn't so you still have the money they would have otherwise gotten from you.

So do you think because they, apparently, missed paying tax liens that you can just walk away without from those liens without paying a dime?

 

[blueman814]

leins owed

I know I owe the $$$ to the IRS. I'm just trying to figure out if it was a simple mistake or something done intentionally. I have no problem with what's owed, it's my understanding that if a refi goes through that is in error it may nullify the refi. The house may revert back to me instead of co-ownership. Of course I would have to reimburse my ex for all the mortgage she has paid over the last 2 odd years which would be just about her take (1/2 interest after sale).
I guess I'm looking for someone who knows about refi's and what happens if the are executed improperly, be it intentionally or by mistake.
Thank you all for your responses.

 

[nextwife]

A lien in place does NOT nullify a subsequent mortgage, it only changes it's "priority position". The lender's title policy insures the lender's position, it is NOT insurance for your benefit.

If the mortgage WAS paid off at the last closing, but NOT "satisfied", then there is a paperwork glitch that can easily be rectified. If the refinance occurred without paying off those liens, they are still there, and still owed.

I asked this at the very beginning of this thread, and you have yet to reply. The answer impacts who is responsible for what. WAS a payoff of those liens deducted from funds at the refinance for disbursement? If so, then the closer/title company collected the funds and has some responsibility to be certain the funds were sent to payoff the lien and to record a sat. If not, the liens are still open and need to be paid. The priority of the newer mortgage is affected, but it has nothin g to do with whether the mortgage is valid.

If you signed mortgage docs then LOOK at your copy!

 

[seniorjudge]

I know I owe the $$$ to the IRS. I'm just trying to figure out if it was a simple mistake or something done intentionally. I have no problem with what's owed, it's my understanding that if a refi goes through that is in error it may nullify the refi. The house may revert back to me instead of co-ownership. Of course I would have to reimburse my ex for all the mortgage she has paid over the last 2 odd years which would be just about her take (1/2 interest after sale).
I guess I'm looking for someone who knows about refi's and what happens if the are executed improperly, be it intentionally or by mistake.
Thank you all for your responses.

We have answered all your questions in excruciating detail.