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Remove Tax Lien for possible Mortgage Approval
Many times, new home buyers in Texas or current home owners wishing to refinance in Texas apply for mortgage financing only to discover that they have an IRS Tax Lien reporting on their credit report that has negatively impacted their credit scores to a point that they cannot qualify for a mortgage. Is there a way to remove a tax lien for possible mortgage approval?
In all cases, Fannie Mae and Freddie Mac will require the Federal Tax Lien to be paid off at or prior to funding — and this is assuming that the Federal Tax Lien has not significantly devastated the credit scores of a borrower to qualify for a mortgage in the first place to get Lender Approval. A repayment plan is not acceptable.
For FHA and VA financing (assuming qualifying credit scores), a person is not eligible for a mortgage until: • The delinquent account is brought current, paid, or otherwise satisfied, or • A satisfactory repayment plan is established between the borrower and the Federal agency owed, which is verified in writing.
Tax liens (in this case) may remain unpaid provided the lien holder subordinates the tax lien to the Government-insured mortgage. Of course, all this ... more

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