See Mortgage Debt Relief Act of 2007 and IRM 184.108.40.206.3, Mortgage Forgiveness. There are four classes of participants to keep in mind when working foreclosures. Specifically, the medical examiner concluded that Darius died from injuries consistent with manual strangulation. When Advisory requires assistance investigating a foreclosure, a courtesy/other investigation (OI) is issued to the Field. Promptly screen the request against the Notice of Federal Tax Lien (NFTL) files and determine the balance due on the liens involved in the proceedings. The tax code treats the amount forgiven as income to be taxed.
When it is determined that consent to the sale should not be given, prepare a letter that informs of the non-consent and contains the following information. Signature of approving official (normally Advisory Group Manager) Provide the original and a copy of the consent letter to the requestor. See IRM 220.127.116.11.1, Investigation Guidelines for Judicial/Non-Judicial Sales, for other investigation guidelines. Some, but not all, states require the party distributing the proceeds to use the priority order of the junior liens attached to the property prior to the foreclosure sale.
Sometimes an interpleader suit is initiated by the party responsible to distribute the funds to determine who has rights to the funds. Non-judicial foreclosures are possible for lenders with mortgages or deeds of trust when a «power of sale» clause exists in the loan documents. Sources from which this information can be secured varies, but examples include the tax assessor’s office and the foreclosing creditor’s attorney. The employee’s investigation should determine if there is a problem with the distribution of the funds and, if appropriate, recommend involvement of Area Counsel. For example, in certain jurisdictions DOJ requests for lien information are handled by the Centralized Lien Operation (CLO). Non-judicial foreclosures do not require court involvement and can be instigated by any encumbrance holder.