@Anonymous wrote:
honestly it was never brought up by either of us.. my wife and I were probably nieve to not know that it might cause a problem.. when the LO brought it up we were already a month or so away from closing and said that we would should try to get it from a family member or make a business loan with a family member to get it and then they gift it to us.. and it all sounded like he just wanted us to get more loans.
The issue is this - when you owe money to the IRS that debt can become a lien (easily) and attach to any and all property you own. In other words, it encumbers the title because IRS debt is a priority lien. Any underwriter is going to want that paid in full prior to your closing so their first position mortgage isn't affected.
If you were the lender, you would want to make sure your mortgage was first in line too rather than having the IRS in front of you with a $14k lien accruing interest every day.
Your LO gave you a heads up a month ago. He wasn't trying to 'get more loans', he was searching for a way for you to get the funding to pay off this delinquent IRS debt so you could close. There is a massive difference between the lender issuing a loan with the debt when the borrower is making payments and if the borrower is just letting the debt accrue.
