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Woman’s Home Confiscated Over Small Water Bill

Woman’s Home Confiscated Over Small Water Bill

Huffington Post
May 20, 2010

One raw day in early February, Vicki Valentine stood by helplessly as real estate investors snatched her West Baltimore home over what began with an unpaid city water bill of $362.

As snow threatened to fall, she watched a work crew hired by the new owners punch out the lock on her front door. A sheriff’s deputy was on the scene while Valentine and her teenage son piled whatever they could into a borrowed car.

Running out of time, Valentine scrambled to pack up clothing and mementos. The home had been her family’s for nearly three decades, and her father had paid off the mortgage in 1984. “It’s hard to say goodbye to this house,” she said. “It’s like someone forcing you out of something that belongs to you. I don’t get it.”

Valentine lost the two-story brick row home after the city sold her debt to investors through a contentious and byzantine legal process called a “tax sale.” This little-known type of foreclosure can enrich investors as growing numbers of property owners struggle to pay their bills.

These foreclosed homeowners are not the families making headlines for taking on mortgages they could ill afford. Families ensnared in the tax sale sometimes are unable to overcome relatively small debts owed to local tax collectors.

Rather than collect the overdue money they are owed, many local governments are selling tax liens. Buyers range from behemoths such as JPMorgan Chase & Co, and some regional banks and law firms, to small-fry investors lured by late-night television commercials promising quick riches. Investors generally bid in an auction for the right to collect delinquent taxes and other municipal debts on property owners, sometimes by paying only a few hundred dollars. When owners can’t pay, investors can pick up property at bargain prices.

It can be a good deal for everyone except the property owner. Selling the debts to investors can help governments efficiently ease budget woes without having the added expenses of debt collection, foreclosing and being a landlord.

Investors, meanwhile, can rake in hefty profits. That’s because they can tack on fees and steep interest rates, which can amount to 18 percent annually in Baltimore.

In Valentine’s case, legal fees and other charges climbed past $3,600 – nearly 10 times her original bill.

Investors purchased an estimated $30 billion of real estate tax debt held by governments across the country in 2009, double the amount a year earlier, according to the Florida-based National Tax Lien Association. Altogether, 29 states and the District of Columbia can sell tax lien debt to investors.

Lien sales in Baltimore have nearly doubled since the housing bubble of 2006. On Monday, the city sold 12,689 liens – a probable record. Properties ranged from boarded-up shells and vacant lots to row homes in gentrified neighborhoods and some commercial buildings.

 

Americans don’t own property, Read The Deed, you are listed as a Tenant!

http://www.youtube.com/watch?v=HjFest-Wnjs

http://www.youtube.com/watch?v=LRXS1jlAr5g

http://www.youtube.com/watch?v=-BU_PqLN-ls

 

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1 Comment so far
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Laws should be passed to extend the period of foreclosure of financially stressed owners’ homes where the debt(s) to be foreclosed on are owed a government or a utility; where the debt(s)directly pertain to the owner’s past or current use of the property (excluding property taxes)and the debt(s)are (small) compared to the home’s equity.

I know of a case where a property owner leased his free and clear property for fifteen years to a large corporation; the lease agreement called for the tenant to pay the property taxes which the tenant did for the first 7-years. The property tax bills were sent to the tenant not the landlord. The property owner lived 2700 miles from his property. Unexplainably the owner had a bad dream one night that the tenant hadn’t paid the property taxes. The next day the property owner learned his tenant hadn’t paid property for two years, and his property was due to be sold off at action in five-days to debt investors that bought the property tax liens from the County for $4,000. The property was free and clear and worth $800,000. The owner immediately paid the back property taxes.

Comment by Sam Westin




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