Private Agencies Step in to Collect Overdue Taxes and Foreclosed Homes
The US is going through one of its most challenging phases. Unemployment is at its peak and people are faltering on mortgage payments. Hence, foreclosures have become common. At this juncture, private investors are stepping in and buying tax liens from government agencies. That means the private agencies have the onus of collecting taxes from defaulting customers.
These agencies are paying cash to the government, who are using the money to renovate parks and other public spaces. The agencies are charging a lot of interest from defaulters and if they cannot cough up the amount, they are foreclosing the properties. Housing experts say that the private agencies are more stringent than government bodies and as they ruthlessly foreclosed homes, many regions are being converted into wasteland. Many areas are riddled with foreclosed, empty homes.
Of course, there are no records of how many tax liens have been sold nationwide. Three years ago, Lucas County sold its tax certificates that were overdue to a company based in Plymouth. The name of the company was Plymouth Park Tax Services. It was a subsidiary of JP Morgan Chase. Also operating under the name of Xspand, it is a very big player in the tax lien business.
The company has filed above 1,000 foreclosures against defaulters. This is the largest ever but Plymouth Park maintains that it has foreclosed only 56 of these properties. The company has bought $2 billion worth of tax liens since last year.
It may be pointed out that foreclosure filings in Lucas increased to 4,093 in 2008. In 2007, the figure was 3486. That means foreclosure filings have at least increased by 7 per cent in that year. John Garzone, Plymouth Park’s president, said the company always entered into negotiations with property owners. It foreclosed properties only if all channels of payment have failed.
Garzone also said the government would have foreclosed many of these homes. The company’s main interest is not to foreclose but to get the homes back into the tax paying mode. However, there is the lurking fear amongst homeowners that they may lose their homes. Take, for instance, 57-year old Christopher Clark who lives on a monthly disability earning of $674. He fell behind on taxes worth $6,450 and also has to cough up $1,853 as interest charges. His home has been filed for foreclosure and he has no idea what to do. To him, it’s just not a house but a home.
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