Critics Allege Tax Lien Buyers are Costing Cities Money
June 21st, 2011
One expert believes that city governments are actually losing money by selling tax liens because tax lien investors “tie up the most valuable properties” in an area and foreclose on others, ultimately “costing the city more money than the properties are worth.” Bill Patteson, a spokesman for Jefferson County, Kentucky attorney Mike O’Connell, believes that his locale gains more from holding its own tax liens and attempting to collect on its own [1]. And when tax lien investors do get their hands on a lien from this area, the local government and other local lending associations are ready to fight. Last spring, the Kentucky Bankers Association (KBA) lobbied against tax lien buyers attempting to file foreclosures on liens purchased before the city stopped selling them. When the lobby failed to curb the activity, KBA filed suit, calling the entire tax lien purchase process unconstitutional. That case has not yet been decided.
Because tax lien holders have priority over other lien-holders on a property, it is not surprising that local lenders would like to do away with the tax lien and tax deed processes. But is it fair to try to declare it unconstitutional?
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Let us know what you think about buying tax liens and working with (or against) lenders when you seek to foreclose on a property in the space below.
[1]http://www.courier-journal.com/article/20110618/BUSINESS/306180051/1001/Tax-lien-sales-cloud-Louisville-s-control-over-houses?odyssey=mod|newswell|text|Home|s
June 21st, 2011 at 7:09 AM
The buyer of a tax deed still has to do a quiet title action to get clear title so the banks still can defend even after a tax deed sale.
June 21st, 2011 at 7:46 AM
Property tax is larceny on consumers and big banks are legal organized crooks. I think investors have the right to earn a return on their investment just like the banks. If banks are concern about protecting their investment then they should step up and keep the tax current or buy the tax liens themselves.
June 21st, 2011 at 8:02 PM
Most Banks are paying these taxes on most properties here in California, but on the ones they don’t investors have the right to buy them and make money from those investments. The banks and gov’t wasted and lost a lot of money, and now they want to blame it on the investors, what about the homeowners? This is a situation that has been going on for a very long time, but now the banks and cities are crying fowl? they created this problem, they should deal with it!
June 23rd, 2011 at 12:24 PM
The Banksters Association should be fined for their frivolous lawsuit. The banksters can pay the taxes to avoid foreclosure, only by their incompetence they would lose the property. The lien investors just help out the Counties by buying their accounts receivables and lien position.