Federal Tax Liens in Foreclosure

[Anthony Cross]

In a mortgage foreclosure, if the owner being foreclosed on has federal tax liens filed against him, will the property remain subject to all or a portion of the federal tax liens once a foreclosure sale is completed?

My assumption is if the property goes above opening bid, the mortgage company as first lien holder is paid off, and the Fed as 2nd/3rd recoups the rest, so I would take free and clear of the federal tax lien, but his tax debt would be reduced and he would remain liable.

[Bob Reinhard]

As I, as a layman understand it, the first mortgage holder ( the lender) can foreclose on the property and wipe out the IRS lien that is filed after it. The IRS, however, has 120 days to redeem the property, as it generally can in local tax lien sales.
Any lien holder, including the IRS, can then go to court to obtain a deficiency judgment against the original owner.

I would value any additional input here.

Bob