Homeowners sold out by cities? Investors foreclose on tax liens

Dartmouth town administrator Greg Barnes (left) auctions off some properties with tax liens to Bill Cowin, managing member of Tallage, LLC. (Peter Pereira/The Standard-Times)

 

As cash-strapped towns and cities around the Bay State face a mounting stash of unpaid tax liens, they are increasingly turning to for-profit companies to pursue delinquent property owners — prompting concern among consumer advocates that vulnerable residents are being hit with astronomical fees and sometimes are losing their homes in the process. Massachusetts cities including Worcester, Lawrence and Lowell — all hard-hit by the nation’s foreclosure crisis and economic recession — have unloaded hundreds of delinquent debts to private investors since 2008 in an effort to raise quick funds for depleted city coffers, interviews and publics records show. Smaller towns like West Springfield and Hopedale also are turning to private companies to collect unpaid taxes. The affects of these sales are now being seen in Massachusetts Land Court where a handful of private companies have filed more than 1,100 cases since 2012 seeking to foreclose on delinquent borrowers whose tax liens they purchased from local municipalities, according to court records analyzed by the New England Center for Investigative Reporting. While the majority of owners turn up to pay their delinquent taxes, a small fraction end up losing their homes or properties for original debts that can start as small as a few hundred dollars, interviews and data show. Continue Reading →