Newbie..Possible Short Sale
Hi Gurus,
Need your advice on a possible shortsale. I have a colleague who's house is going to foreclosure auction on sep 2nd '04. He owns the bank about 220k. The FMV of the house is 350K. The owner is 10 months behind on payments. Now the interesting part,
The owner took a huge loss in his business and owes the IRS taxes worth 170K. owner is filing for chapter 7 soon to start fresh. The house is in perfect condition. How do I proceed with this? I want to help my www.colleague.Owner is willing to work with me. Please advise on how to deal with the IRS and approach the bank?
Thanks,
mvm
What is the date of the IRS lien? My hunch is that the first will be paid in full... the IRS, however, might be willing to settle for less.
ShortsalePro,
Thanks for the reply. The date of the IRS Lien is in 2001. The lien was placed for the taxes owed in 2000.
how exactly would I talk to the IRS about possibly settling for less? Also, do I have enough time to negotiate with the IRS before the foreclosure.
Thanks,
mvm
I'm sorry. My previous question was incomplete. When was the mortgage originated/filed.
My suggestion is that you devise and present a compelling and fact driven Proposal to the IRS... seeking a short settlement predicated upon the value of the home and equity.
For example, if you can justify a FMV of $300,000... deduct mortgage/foreclosure fees and there is about $75,000 in equity... See if they would accept 50% of the equity... or $35,000.
Not much different that drafting a ss proposal to a foreclosing mortgagee.
What department at the IRS do you contact for this and also how would you propose finding the telephone number needed?
A 1,000 mile journey begins with the first step. I would start with the correspondence from the IRS to the delinquent taxpayer, then onto the lien itself.
Sounds like an obvious first start. Thanks for the help. I haven't run across this yet but I'm sure that I will.