This has everything any campy 1980s movie about the poor old lady losing her house because <something evil> will evict her unless she pays back <largesum> by <deadline>.
But read this carefully. In real life, that "evil" private corp. wouldn't buy the debt, foreclose, and "steal" the equity if there wasn't equity to steal. The lady should have taken a regular (or reverse) mortgage, etc. and paid the relatively tiny tax lien and would have come out $200K+ in the black. The fact that she did not understand or was unable to do that does not erase the fact that she owed and did not pay her taxes. Can you imagine what would happen if "I didn't know" or "I was stressed out" was an excuse to avoid taxes?
There's nothing unique, unconstitutional, or immoral about any of this. Sad, yes, but that should be solved by education not law. And in one form or another it's the same everywhere - you don't pay your taxes, you will get screwed!
> There's nothing unique, unconstitutional, or immoral about any of this.
Of course it’s immoral! From the article:
> If the homeowner still cannot pay, the company can foreclose on the property and evict them. After paying the taxes, it gets to keep the remaining equity in the property — which could be hundreds of thousands of dollars.
> That contrasts with what happens when a bank forecloses on a property. In that case, the bank sells the property, deducts from the proceeds what it is owed, then returns any remaining equity to the former owner.
If someone wants to buy the tax liens from a government and charge the 16% interest mentioned in the article, fine. But to grant them some kind of nuclear foreclosure power that lets them take the entire property (rather than simply force a sale and take the owed amount), especially if it happens to be someone’s actual home, is absolutely immoral.
How is that "immoral"? It's not. She had the choice to pay the taxes and keep the house. And CHOSE not to. If you make a bad business decision and you get screwed, it's not a moral problem.
She could at ANY TIME have paid the lien. She had ample assets to do so.
> But to grant them some kind of nuclear foreclosure power that lets them take the entire property (rather than simply force a sale and take the owed amount)
This is 100% misleading reporting in the article. In nearly all jurisdictions, when a bank forecloses, they CAN keep the property and do whatever they want. Including selling for a ridiculous profit.
The reason this isn't a problem is that people that are highly "right side up" don't generally fuck up and foreclose, because that would be STUPID.
16 percent interest is usury considering the real estate asset the lien is attached to and IRS short term interest rates. It would be entirely reasonable to prohibit the sale of the asset until the death of the elderly owner and have the taxing authority made whole with a transfer at that point.
> This is 100% misleading reporting in the article. In nearly all jurisdictions, when a bank forecloses, they CAN keep the property and do whatever they want. Including selling for a ridiculous profit.
The law is whatever the local citizens want it to be, by the way. Even if that means being overly cautious with seniors and what is possible the last meaningful possession and wealth they might have.
> The reason this isn't a problem is that people that are highly "right side up" don't generally fuck up and foreclose, because that would be STUPID.
Some amount of empathy is required when considering policy that impacts the elderly. Government exists, in part, to provide harm reduction measures. And they'll get their property tax revenue due eventually as long as the property stands.
> In a 50-page report released in December, the Pacific Legal Foundation says “unlike most states, which return what isn’t owed to them after a property tax debt is paid, the [Massachusetts] tax foreclosure system unjustly take millions of dollars in home equity from property homeowners every year — indifferent to the suffering it causes.”
> More than 150 homes were foreclosed upon for tax debts by private companies in the seven-year period ended in December 2020, allowing “the taking of an estimated $37 million in equity above what these homeowners owed in property tax debt,” according to the report.
> it would be entirely reasonable to prohibit the sale of the asset until the death of the elderly owner and have the taxing authority made whole with a transfer at that point.
Why should we allow anyone to do that? just pay their taxes like everyone else. This isn't even a case of someone that couldn't do it! Education and a less callous handling would be nice, but you can't legislate your way out of this - if you don't have a eviction hammer, nobody will pay taxes.
I agree about empathy, which you might be surprised to find, I have actually a lot of. But there's nothing immoral with any of the actors, the article is slanted and overstating a position. I'd be great with a municipally funded outreach program (or even loans?) to help seniors.
If this were an article about a citizen killed or gravely injured at a traffic stop, would you argue that without violent enforcement nobody will stop at red lights?
> would you argue that without violent enforcement nobody will stop at red lights?
No, I would not. What the hell are you even talking about violence?
If you could argue that you were "ill" "confused" "old", etc. and then they could not use repossession and eviction as an ultimate penalty for collecting taxes owed, then what do you think would happen?
EVERYONE would be very soon become "confused" and you would lose the ability to collect property tax.
To argue this is immoral is simply basically to argue that taxation itself is immoral.
she chose to freeze up and do nothing instead of fixing her situation. She chose to let a +200K equity get repossessed and taken instead of paying her taxes.
She chose to let a 10K tax bill balloon into a 24K tax bill and then freak out and not pay them even though she had 200K+ in the "bank". To get the money in the "bank" (her equity) she'd have had to do some financing and take some action. She didn't.
She chose to "petition the court" to ask if she had the right to sell which was sadly a waste of time because it's not the courts job to answer such things. Before the foreclosure was final, she still owned the property and could do whatever she wanted. She didn't take action!
In short she chose to freeze up and fail instead of hiring competent consul and fix her situation.
This is a sad and unfortunate case. It illustrates to me that our systems are difficult and can be unforgiving. It illustrates that we need something extrajudicial that has compassion, for example outreach, advice, support.
What it is not is immoral. Following the rules is not immoral, nobody lied, cheated, etc. The existing rules leave enormous amounts of time and leeway to correct mistakes and fix things. The plaintiff had to spend $100,000 on court fees to push this eviction. That's not a simple thing so there was lots of time and opportunity to reverse this. And it's economically a lot of effort wasted if she would have instead just paid her taxes.
90% of the people reading this are not as well off as the "victim" was - they don't own their house free and clear with a bunch of equity. Well, even if you do someday, guess what? you still have to pay your taxes.
> She chose to let a +200K equity get repossessed and taken instead of paying her taxes.
So you're saying that she had the financial capacity to pay the taxes, but chose not to? Am I understanding you right? Because I'm fairly certain that the article stated otherwise.
YES! As the article made plain, she had a LOT of equity in her house.
Now equity isn't as good as cash, but there's at least 10 ways to convert it to cash so you can pay your taxes. In her case, I'd think a reverse mortgage would be the best bet, but maybe a secured loan, etc., etc. She needed financial and legal advice - in a case like this get a lawyer.
If company is given right to foreclose, they can recover costs + interest, remaining equity to homeowner.
If company is not given right to foreclose, fair enough, they get an equity interest they can't liquidate until perhaps a sale in the ordinary course (ie, passing of owner).
But read this carefully. In real life, that "evil" private corp. wouldn't buy the debt, foreclose, and "steal" the equity if there wasn't equity to steal. The lady should have taken a regular (or reverse) mortgage, etc. and paid the relatively tiny tax lien and would have come out $200K+ in the black. The fact that she did not understand or was unable to do that does not erase the fact that she owed and did not pay her taxes. Can you imagine what would happen if "I didn't know" or "I was stressed out" was an excuse to avoid taxes?
There's nothing unique, unconstitutional, or immoral about any of this. Sad, yes, but that should be solved by education not law. And in one form or another it's the same everywhere - you don't pay your taxes, you will get screwed!