This man owed $134 in property taxes. The District sold the lien to an investor

Wilikon

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Quote from: DeathAndTaxes on September 10, 2013, 10:07:09 AM

Quote from: tinus42 on September 10, 2013, 08:49:34 AM

So if the house is auctioned off for say $150,000 the private investor can keep the full amount of the money that was raised? And not pay back the surplus to this guy? That seems wrong to me. It must be very lucrative to be in this business then. Roll Eyes

No. Although the OP makes it seem like that.

Don't shoot the messenger. I did not try anything. Just copy pasted the title of the article without any personal comments.

But of course you are free to see it differently.

DeathAndTaxes

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Quote from: DeathAndTaxes on September 10, 2013, 10:07:09 AM

No. Although the OP makes it seem like that. The house is foreclosed and sold at auction. All creditors including the lien holder and mortgage company are paid any excess equity ends up going to the owner. No different than any other foreclosure.

In this mans case he owed $134 didn't pay it, the lien was sold, 6 months passed and the lien increased to ~$5,000 due to interest, penalties, and fees. That is likely predatory and some caps should be put into place but I would point out the lien holder "only" got $5K not $197,000. The amount of his mortgage and lein were more than the house sold at auction so the residual equity was zero. In other words the man was already broke before the foreclosure occurred.

I may have misread the article, but I thought it said that the mortgage was paid off, and the lien holder got to keep all the equity, not just the amount owed.

If your interpretation is correct, then I don't think there is anything wrong with what happened.

No it never stated the mortgage was paid off only that tax lien holders are paid AHEAD of even the mortgage. So hypothetical scenario the house is worth $197K, it sells in auction for $160K net. The lien was $5K, the mortgage was $170K. The lien holder gets their $5K (not bad if it cost them $134), the mortgage company gets $155K ($160K sale price - $5K) and take a $15K loss on the mortgage. Homeowner loses home which potentially had $27K in equity because you are never getting top dollar in an foreclosure auction.

DeathAndTaxes

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Quote from: tinus42 on September 10, 2013, 08:49:34 AM

So if the house is auctioned off for say $150,000 the private investor can keep the full amount of the money that was raised? And not pay back the surplus to this guy? That seems wrong to me. It must be very lucrative to be in this business then. Roll Eyes

No. Although the OP makes it seem like that. The house is foreclosed and sold at auction. All creditors including the lien holder and mortgage company are paid any excess equity ends up going to the owner. No different than any other foreclosure.

In this mans case he owed $134 didn't pay it, the lien was sold, 6 months passed and the lien increased to ~$5,000 due to interest, penalties, and fees. That is likely predatory and some caps should be put into place but I would point out the lien holder "only" got $5K not $197,000. The amount of his mortgage and lein were more than the house sold at auction so the residual equity was zero. In other words the man was already broke before the foreclosure occurred.

I do agree with others that there is no such thing as owning property. Not with perpetual property tax.

Ekaros

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Quote from: tinus42 on September 10, 2013, 08:49:34 AM

So if the house is auctioned off for say $150,000 the private investor can keep the full amount of the money that was raised? And not pay back the surplus to this guy? That seems wrong to me. It must be very lucrative to be in this business then. Roll Eyes

Must be one very great nation where this sort of stuff happens...

Is it in some third world country?

tinus42

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So if the house is auctioned off for say $150,000 the private investor can keep the full amount of the money that was raised? And not pay back the surplus to this guy? That seems wrong to me. It must be very lucrative to be in this business then. Roll Eyes

TheButterZone

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RIP Mommy

Quote from: Peter Lambert on September 09, 2013, 12:56:49 PM

Are there any states which do not use a property tax system?

The only jurisdiction I know of that charges zero property tax (unless the state and/or county stick their guns in it):
www.cityofstafford.com/home/welcome.htm

nobbynobbynoob

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Annuit cœptis humanae libertas

North Dakota did have a referendum on scrapping property taxes but I know not the outcome.

Mike Christ

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It is shameful that the man gave up his house over a $134 tax bill. If he had only paid the $134, he wouldn't have lost his $200,000 home. This is an extreme example of "cutting off the nose to spite the face"!

Having said that, a system that allows the lien holder to keep the entire property regardless of the amount owed is definitely broken. I bet if that man sued the city, he would get his money back (and more)

Let's hope so. I believe he has dementia; I'm unsure of what having that is like, but I presume it's one of the reasons he didn't rush to pay the bill before losing years of hard work; the only other reason would be lack of funds, which I can relate with.

Nigeria Prince

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It's normal in America.

Mike Christ

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Quote from: Peter Lambert on September 09, 2013, 12:56:49 PM

Are there any states which do not use a property tax system?

After a quick search on the net, it seems all nations have property tax, but tax in a different way. So it's true; there is no private land, anywhere.

Peter Lambert

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It's all fun and games until somebody loses an eye

Are there any states which do not use a property tax system?

Sage

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So long as there is property tax there is no private property ownership.... just rental from the government. If this story doesn't make that illusion of private property visceral real I don't know what will.

This country would have never become the great country it ounce was without private property ownership.

It will never become great again until we re-install that basic tenant of prosperity, private property ownership.

Mike Christ

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When I first read this early in the morning, I didn't know what to say; I was pretty upset that this actually happened.

I'm still mad. This man's life was ruined over $134, as well as others. It's just stunning how completely heartless people are when faced with the ability to accomplish a feat such as this.

Wilikon

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This man owed $134 in property taxes. The District sold the lien to an investor who foreclosed on his $197,000 house and sold it. He and many other homeowners like him were
Left with nothing.

http://www.washingtonpost.com/sf/investigative/2013/09/08/left-with-nothing/

Topic: This man owed $134 in property taxes. The District sold the lien to an investor (Read 1236 times)