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What is happening to Lien Notices

June 27, 2017 | By More

credit-scoreThe IRS loses on liens to your credit score

Recently I was informed of Liens and Debts credit reporting changes in the three credit reporting bureaus. The following is my research to help you, the taxpayer, know what is changing and how it will impact on you.

Here in the United States, we have may organizations to protect our rights. One of them is the Consumer Financial Protection Bureau. If you find what you think is not correct in your credit report your first contact that credit reporting agency. If you still feel the issue is not corrected you can contact the Consumer Financial Protection Bureau and file a complaint. Many taxpayers filed complaints.

The three major credit reporting bureaus have agreed to change how they will report your credit information.

The key points that benefit the consumers is the requirement for reports to contain the following:

  • The consumers correct and the full name must be listed
  • The consumers correct and full address must be listed
  • The MAIN issues are the full Social Security Number and or dates of birth listed.

Unless the complete Social Security Number/ or dates of birth are provided none of the
three major consumer data providers will list the liens. If the IRS were to comply, in my opinion, they would be in violation of their regulations of confidentiality.

As of July 1st, 2017 unless all the above data is presented any liens and some debts will be removed.

How does this impact the consumer?

Without the lien notices/debts being included in the FICO score, the score will be higher. Mortgage companies are already preparing for alternative resources to locate the liens/debts that are not posted.

This looks very good for the home buyer to get the mortgage they need. Based on this, my assessment is that our economy could see another run of ‘underwater’ mortgages and abandonment homes. The money will be lent to those who really cannot pay the mortgage.

We will see again homes foreclosed or sold in quick sales – leaving the borrower with debt that will then be reported on their credit scores, but at a higher negative score.

In my tax practice, I have seen the turn-around after the last home mortgage issue has been resolved.

Professional Speculation – The banks will be tighter on loans as they will need to seek alternative methods to verify that an applicant will indeed be in the position to pay the mortgage.

Home sellers will see slower sales due to the additional time it will take the bank underwriters to complete the background research on the requesting borrower.

I do not see the IRS opening the door for any taxpayer’s credit to be compromised by complying with the HB-5282 the Comprehensive Consumer Credit Reporting Reform Act of 2016 – Consumer Financial Protection Bureau response to the complaints against the credit bureaus.

Contributed by Claire Schapiro, E.A. – IRS Federally Licensed as an Enrolled Agent
Cameo Enterprises Inc. is located in Chino Valley, Arizona. For more information or to contact Claire Schapiro, E.A., visit http://www.bookkeepinghelp.com/business/52466-86323/cameo-enterprises-inc/chino-valley-az

Article information should not be used exclusively to make legal, financial or tax decisions. Because laws and rules can change frequently, topics may not always be updated to reflect these changes or may not apply to your unique situation. It’s prudent to seek out the advice of a professional for your specific needs.

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Category: IRS Problems

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