Tax liens, home buyers, and Obama's stimulus plan.

[NW Admin]

I happen to have a tax lien from a year that I wasn't doing too well physically and financially. Being self-employed, it was easier to pay my bills, keep the roof over my head, and buy food then it was to pay taxes to the IRS. I am sure in this day that there are many people out there who can understand. There is a HUGE amount of American people who have tax liens. What does that say about our government? Maybe that their taxes were outrageous? There should be some system in place to help out people like me who were not able to pay their taxes because of life situations.

Regardless, here I am now with this option (as a first-time home buyer) to buy a home and get an $8,000 credit for doing so. BUT... and a big BUT... it's only good until the end of this year. So here I am... having worked and worked on my credit, making sure all my payments are always made on time for the last several years, have my 10% down payment saved up... and guess what... I CAN'T BUY MY HOME because the IRS put a tax lien on me! Having the tax lien doesn't mean I am not responsible with my monthly bills, because the rest of my credit report shows that I am. Yet, that one thing means I am probably going to miss out on the opportunity to take advantage of Obama's $8,000 and also the low home prices and low interest rates. My only option is to pay off the lien. I don't have anough money to pay it off and doing so would mean I no longer have a down payment for my home. Soooo looks like I am screwed no matter what!

Now, the IRS AND FHA says they both will allow the IRS to subordinate their tax lien for the purpose of refinancing and new home purchases. BUT... and here we go with more of those... NO BANK in Ohio will approve that for a home buyer!!! In fact, I called Countrywide mortgage and asked them if they would approve a tax lien subordination. The guy told me... and I quote... "FHA will not allow that!" I said that I personally spoke with FHA and they said they would. He quickly changed his tune to "Well, WE won't do that! And no other bank will for that matter. It's too much of a risk." So what the hell?? Pardon my language, but it infuriates me. Ok so the IRS and FHA get to look like the good guys... reaching out a supposed helping hand... and then SLAP... you get smacked in the face by the lender for even thinking that might work.

So all in all, it doesn't matter that we have the income and time on our jobs. It doesn't matter that we have proof of on-time monthly rent payments for years. It doesn't matter that my husband and I have good payment histories with established credit. Nope. It means nothing. The only thing they see... is a tax lien from many years ago. What a joke. It's no wonder the economy is failing. No one trusts anyone and no one will lend to anyone.