Property Tax Lien Foreclosures : Homeowners lose and local governments winSubmitted by emalvini on Thu, 07/12/2012 - 19:12
Property Tax Lien Foreclosures : Homeowners lose and local governments win
Thursday, July 12, 2012
(book by Larry B. Loftis)
An often overlooked, but nonetheless important aspect of the foreclosure crisis has involved property tax lien foreclosures.
When a property owner falls behind on mortgage payments, local governments can impose a tax lien that, if not paid off, can result in foreclosure proceedings. In order to secure revenue, the governments sometimes sell the liens to private investors, who, in some instances are able to recover interest at rates of 18% to 50%.
Complicating the problem are tax sale procedures that are understood by only investors and purchasers. As the National Consumer Law Center put it in its report:
“Inadequate notice and a lack of judicial oversight over the process leave many homeowners in the dark about steps they can take to avoid a home loss. Homeowners most at risk are those who have fallen into default because they are incapable of handling their financial affairs, such as individuals suffering from Alzheimers, dementia, or other cognitive disorders.”