offers the loan will pay the delinquent tax bills and assume the corresponding lien ownership. The homeowner then pays back that loan based on a previously agreed-upon predefined installment plan. Usually, per state law or regulations put in place, these types of loans are structured with a minimum 12-month duration, however, with interest rates as high as 18%. The lien and tax delinquency loans are a multimillion-dollar industry in every state. Such loans constitute an extensive and profitable business for the banks that issue them, a business that often comes at the expense of the debtor as they quickly find themselves unable to keep up with the high interest rates.
REFINANCE YOUR LOAN
Refinancing your home loan is another option. Contact your bank and other lenders while shopping for a more convenient interest rate loan. However, if you intend to pursue refinancing a home mortgage that has one or multiple liens on it, you might find this aspect represents a major roadblock. Obtain accurate documentation of all the liens on the property (e.g., mortgages, IRS, and mechanic liens). It’s possible to work with the IRS to get agreement that the refinancing lien takes precedence over the tax lien. In case you’re opting for a “cash out” loan, the IRS might agree to sign off on it by your agreement to pay all delinquent taxes and penalties through the proceeds of the refinance. But be careful. Refinancing—even at a lower interest rate—often means ultimately decreasing your equity and raising your overall debt.
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