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Updated almost 7 years ago on . Most recent reply

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Soo Y.
  • Bergen County, NJ
0
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11
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Federal Restitution Lien in Place but USA Not a Named Defendant

Soo Y.
  • Bergen County, NJ
Posted

Here is a real-life scenario:

1. SFR listed on MLS;

2. Same SFR also has a Lis Pendens filed against the owner and is scheduled to come to sheriff sale next month;

3. Lis Pendens was filed two months before the United States of America put a federal lien ($$$!) on the property because the owner is liable for restitution in a criminal case;

4. Because the Lis Pendens was filed prior to the federal lien, the USA was not a named defendant on the Lis Pendens;

4. Seller's MLS listing agent claims not to know about the federal lien, speaks with Seller's attorney and attorney tells agent that they will be able to deliver clear title (attorney did not state how);

5. Seller's agent pushes for a written offer, noting that the Seller is very motivated (obviously).

I hope you're able to follow the above.  Questions:

1. Could the sheriff sale move forward with the LP not listing the USA as the defendant?

2. If so, does that mean the federal lien stays with the house notwithstanding a third party purchases at auction?  Typically, even if the USA is a named defendant in a foreclosure action, the government has either a 120 day or 1 year right of redemption.

3. Short of Seller paying off the federal lien ($$$!), I cannot see how Seller could give clear title.  Could you?

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