Medicare liens and tax foreclosure

[Dylan D.]

Does anyone know or have experience with Medicare recovery liens. The lien was filed prior to the tax lien. Would this lien survive the foreclosure? 

[Eliott Elias]

Sounds like you found a Niche 

[Bruce Lynn]

Good question.  Normally federal/government liens don't fall off with foreclosure sales, including tax foreclosure sales.  Never seen one of these, but there are IRS, DEA, Federal Terrorism Task Force, Homeland Security, etc type liens.   Every now and then I will see these in their own Treasury auctions along with cars, boats, planes, jewelry, etc.

If they were notified in the original foreclosure action, probably they have certain time frame to respond....

Not sure if it will tell you what you need to know, but you might check this website.

https://aspe.hhs.gov/reports/m...

I would plan on paying them off, but maybe you get lucky and they drop them.   I've bought one with IRS lien and was never contacted by them.  I've heard of a handful of others also buy with IRS liens and they ended up dropping off.

[John Underwood]

Make sure the county sent them proper notification. 

The county tax office should know the answer to this, check with them.

[Adam Walter]

I am not an attorney, but I purchase foreclosues in Ohio and have purchased a Tax foreclosure in Ohio where there was a Medicare lien.  It was removed after the foreclosure like any other lien.  

To my knowledge the only lien to survive a foreclosure in Ohio is federal tax liens and they have a 6 month redemption right which is rarely exercised.  I've also see foreclosures sales that are subject to the first mortgage (at the bank's request) if a junior lien holder is foreclosing like a condo/hoa association.  This is also rare, but I've seen many people buy it not knowing what they are buying the property with a lien attached.     

Like @John Underwood said make sure that the lien holder was served notice in the foreclosure.  You can also get a title search after the sale and see if there are any errors and address those before the confirmation.  As always, do you due diligence and seek the advice of a real estate attorney for more information.  

[Chris Seveney]

@Dylan D.

The quick answer is if a first position lien forecloses and their are not enough funds to cover junior liens it does not stay with the property

Long answer is it depends on lien priority and who is foreclosing. If it was recorded prior to the lien holder filing foreclosure then yes, but if subsequent to the lien holder no.

[Ned Carey]

@Dylan D. my educated guess. By state law they are wiped out. By federal they are not wiped out.  This is  very technical legal issue and my depend on not just statutory law but common law and specific case law precedents. Now it is quite possible that Medicare would never discover it and it would be a non issue. 

What makes it an issue, is whether a title company will insure it. Even if Medicare never comes back on it, you may not be able to sell the property because it can not get financed without title insurance.  I would talk to a good title company and ask if they can insure.