Mortgage foreclosure, $400,000 in state/federal tax liens

[Nathan Gesner]

We rarely have foreclosures in my area and there's never enough meat on the bones. I finally saw one that looks promising, but it looks less promising now that I've researched it.

ARV is $400,000, house is standing and I've known it for years. It may require cosmetic renovations, but it's in good shape. Mortgage was originally $110,000 recorded in 1996. It's been assigned five times and Owner currently owes $61,215 plus fees.

The bad news is that I discovered 28 liens on the property:

- two of them are collections and would be wiped out

- 13 are federal tax liens against the individuals, with their social security number listed

- The remainder are State tax liens totaling around $40,000

I've been trying to read up on this and can't get a straight answer. The mortgage was recorded in 1996, so do the Federal tax liens get wiped out with a mortgage foreclosure? What about State? If it were just the State liens and mortgage, this property would be well worth the bid. With the Federal liens included, there's more owed than the property is worth.

One more note: the husband died in 2020, his wife died the year before that. Someone's been keeping up with mowing the lawn and the electricity is still on. There is a second house on the property that was probably a rental and appears to still be occupied.