Tuesday, July 31, 2012

Could you lose your house over a water bill?

The Consumerist tells a chilling story about tax liens.
"Say you fall behind on your property taxes, or choose to make your car payment instead of the water bill. It doesn't take much for some municipalities to file a tax lien against a homeowner, often a debt of only a few hundred dollars [...] Those liens are often sold to companies that tack on substantial interest rates starting in the 18% range, and upwards of 50%. These lien buyers also charge huge fees to redeem the liens and avoid foreclosure. [...] redemption penalties in Georgia, Iowa, Mississippi, New Jersey, and Texas all exceed 20%."
"There is the Baltimore woman whose $362 water bill was sold off to a lien buyer. Interest and fees caused the amount to balloon up to $3,600. She couldn't pay and lost her house.
An 81-year-old woman in Rhode Island owed $474 on her sewer bill. The tax lien buyer snatched up her lien for $836 and then made a huge profit by selling her house for $85,000."
"The consequences of homeowners not understanding their rights or the process of a tax lien sale is devastating for individuals, families, and communities."

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