chrisdowdy76, Home Buyer in Murfreesboro, TN

State Tax Lien paid in full but can't close on the house.

Asked by chrisdowdy76, Murfreesboro, TN Thu Sep 19, 2013

I have paid in full 2 state tax liens once they were brought to my attention through the buying process. I have a certified copy of the cancellation, but it will take weeks for it to officially clear through the county clerks office. My LO is telling me that until it officially clears we cannot close. (Which is in 8 days). Is there anyway around this?

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I really don't think this an issue of credit and having the debt showing paid in full on the report. I think this is an issue of lien priority in the title and recording process. That's why the delay until it officially appears and "clears" through your county clerk's office.

If you cannot close your transaction on time per your purchase agreement, perhaps your loan officer can explain the situation to the Seller and/or Seller's agent - that you have no additional underwriting requirements and the loan is fully expected to fund and your transaction will close by "X" date. If amenable to the Seller, get an extension in writing.
1 vote Thank Flag Link Thu Sep 19, 2013
I totally agree that it is not an issue of what its showing on the credit report. I wish I could give them a "X" date, but at this point they are saying it could take 10-12 weeks, which is crazy. I'm not very confident that the seller would be willing to wait that long.
Flag Thu Sep 19, 2013
I just had the same issue with a closing last week and as soon as the cleared lien was posted we were able to close. It took us an additional 2 weeks. Best of luck
1 vote Thank Flag Link Thu Sep 19, 2013
Yon would need to take direction from your Loan Officer. With a copy of the paid receipt, they should be able to have the credit reporting agency verify the paid in full status.
1 vote Thank Flag Link Thu Sep 19, 2013
That is what I'm thinking, but they are saying that is not the case. They are saying that they must have the official "release of lien" which to me is the letter.
Flag Thu Sep 19, 2013
Ask for an extension and title company to help expedite process.
0 votes Thank Flag Link Sat Sep 21, 2013
If you have certified proof of cancellation, that should be enough proof for the title company to remove the liens. I would suggest calling the title company, and sending them the documantation that you have. If they are able to review the documentation, and determine that they are in fact satisfied by calling and confirming with the clerk's office, you could be okay to proceed. It isn't the fact that they are showing up on the credit report, becuase a mortgage underwriter would accept a "credit supplement" to the credit report confirming that they liens are paid. It is the fact that the title is not yet cleared. The title company is who you can look to for any help possible. It may be that they still need to wait, I am not sure without seeing the actual documentation you have, nor do I know if the Clerk's office will be able to confirm, but that is your best bet for closing now.

Good Luck!
0 votes Thank Flag Link Fri Sep 20, 2013
While Sellers don't like contract extensions, you have to ask. If they say "no," which is a real possibility given the length of time involved, your next move would be to sweeten the pot. By this, I mean making your earnest money (good faith money) in whole or in part non-refundable. In doing so, you will surrender (to the Seller) a specific amount if your loan doesn't close - which obviously puts your money in jeopardy. On the other hand, it assures the Seller "something" for his wait. If you decide to do this, make sure the written extension gives you enough time to close!! The idea is to keep the Seller engaged - NOT to lose your money!
0 votes Thank Flag Link Fri Sep 20, 2013
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