IRS Right of Redemption

[Matt Pfefferlen]

I am looking at a foreclosure with a 1st lien foreclosing and the property has a second loan with an IRS lien after the 2nd.   After foreclosure by the 1st lien whereby the second gets zero, does the IRS need to pay some of the funds to the 2nd if the IRS exercises the right of redemption and sells the property for more?

[Jay Hinrichs]

Quote from @Matt Pfefferlen:

I am looking at a foreclosure with a 1st lien foreclosing and the property has a second loan with an IRS lien after the 2nd.   After foreclosure by the 1st lien whereby the second gets zero, does the IRS need to pay some of the funds to the 2nd if the IRS exercises the right of redemption and sells the property for more?

thats a good question.. my experience buying court house steps on the west coast is that unless there is MASSIVE equity in the house IRS never redeems some of my very best purchases have been those with IRS liens  scares the other bidders away or the ones that need to immediately secure up the property with a loan that requires title insurance.  For cash buyers its a great deal.. If they redeem rare to the extreme then they have to pay you back plus a statutory interest rate. Although anything you do to the house other than secureing it or protecting it from the elements will not be refunded to you.