PLEASE SHARE MY COMMENTS WITH YOUR EMAIL LIST:
Per the article copied below "Predatory Property Tax Collection" here is the why government did this. The feds put it through last year at the recommendation of a few private associations that represented many local governments and it was the government that pushed forward to require the banks and mortgage companies to do the tax collection tied directly into the mortgage. (Quicker money for the local governments) Read the new mortgage documentation and the banks have been required to collect property taxation up front for the local government.
Government in most venues had to wait four (4) years to move forward with foreclosure for delinquent property taxes. Well now that they have assigned the banks to do the collection, the banks usually move on foreclosure in six months which gets a new head in the door to pay the same levied property taxes quicker.
I note that is a severe conflict of interest and that all who own a home should move on code enforcement against their local governments.
The property tax is for the benefit of the local government (the beneficiary) of which in many venues when established the people securing their interests to protect themselves made sure there were strict time-lines and procedures required before a local government could try to grab your home for past due property taxes.
Well, it appears they have bypassed those restrictions with this one tactic. BUT, being that the local government is the beneficiary of that property tax collected through the mortgage they are also the primary responsible party by assignment or allowance for assignment as the underling direct beneficiary. In doing so or by participation, they have broken their own laws and statutes firmly put into place on their books that allowed them to collect property taxes in the first place.
In fact based on the damaged parties (number of home owners effected) the potential of claim value from these type of collection actions actions to bypass standing local government restrictions; statute; and law here for the direct benefit of those same local governments, it would be good grounds for suspension of that or any local governments charter (shut them down) for having participated for the purpose of financial gain.
Walter Burien - CAFR1.com
IN REPLY TO THE FOLLOWING:
The Big Wall Street Banks Have Found A New Way To Strangle The American People: Predatory Property Tax Collection
The Economic Collapse
It turns out that the big Wall Street banks have found a dirty new way to make loads of cash from U.S. homeowners, and they really, really don't want to talk about it. So what is this dirty new business? America's biggest financial institutions have become property tax collectors, and it is extremely lucrative.
From coast to coast, the big Wall Street banks are buying up thousands upon thousands of tax liens and are making a killing by socking distressed homeowners with predatory interest, outrageous penalties and almost unbelievable legal fees. In some areas, the big banks are able to foreclose on these homes in as little as six months. The elderly and the poor are the most common targets of these practices. An absolutely brilliant expose in the Huffington Post has brought these issues to light, and it is creating quite a controversy in the financial world. The big banks are doing nothing illegal here. Local governments are offering to sell thousands of tax liens and somebody is going to end up buying them. But something seems extremely unsavory about the big Wall Street banks capitalizing on the economic downturn that they were so instrumental in causing in such a predatory manner.
Today, millions of American families are barely hanging on to their homes by their fingernails. Millions are out of work and millions of others are barely making enough to put food on the table. Meanwhile, property taxes have absolutely soared in most areas of the nation over the past decade. Many Americans are finding that when that time rolls around they simply do not have a big chunk of extra money to pay a property tax bill.
So millions of American families, including many that have completely paid off their homes, now find themselves in danger of being thrown out on to the street over an unpaid property tax bill.
For many local governments, the headache of trying to collect on thousands of property tax liens is just too much, so they are glad to outsource the work of collection.
So how do the big Wall Street banks get involved? Well, it goes something like this.
1) The big Wall Street banks set up or invest in shell companies that will disguise who they really are.
2) These shell companies run around and buy up all of the tax liens that they can get their hands on.
3) Predatory levels of interest (in some states as high as 18 percent), fees and penalties rapidly pile up on these unpaid tax liens. The affected homeowners quickly end up owing much, much more than what the original tax bills were for.
4) If the collecting firm has to hire a lawyer, then that gets charged to the homeowner as well. The bloated legal fees for some of these lawyers can end up being the biggest expense of all.
5) If the tax liens do not get paid, the collecting firms move in to foreclose as quickly as legally possible.
According to the Huffington Post, Wall Street banks such as Bank of America and JPMorgan Chase have been gobbling up several hundred thousand tax liens from local governments. It appears that distressed housing markets¯ are being particularly targeted.
Many of these tax liens are sold in online auctions, so it is unclear if many local government officials even realize who the big money behind many of these shell companies is.
Once again, this is all perfectly legal, but it is more than a little distasteful.
The following video by the Huffington Post does a good job of summarizing what they found. The truth is that there is a huge difference between the letter of the law and true justice.
Just consider the following tragic story from the Huffington Post article
Barbara Carpenter, a 58-year-old disabled Ohio retiree, found herself in such a situation. The former worker for the American Red Cross struggled to save her Toledo home from a JPMorgan entity called Plymouth Park Tax Services, which in recent years has been among the nation's top buyers of tax liens.
It's a great neighborhood and the house is in good condition, ¯said Carpenter, who paid $67,000 for the one-story home in 2004. But she fell behind in paying her taxes and a certificate for $1,500 in unpaid taxes was sold off to Plymouth Park, which is based in New Jersey.
Carpenter's lawyer, Joseph Westmeyer, said Plymouth Park routinely charges an upfront fee of around $1,500 as soon as it buys the lien and 18 percent interest on the debt. If they don't get paid, they foreclose.
It's not a good deal for poor customers,â€¯ said Westmeyer. Carpenter wound up selling the house in August for less than half what she had paid. Plymouth Park received about $12,000 in legal fees and other charges, including some additional taxes, Westmeyer said, quoting from court records.
Does that sound like an honorable way of making money to you?
Would you like to make your living by throwing elderly women out of their homes and into the street over unpaid tax bills?
Unfortunately, this problem is not going to go away any time soon. One out of every six Americans is enrolled in a government anti-poverty program. Tens of millions of Americans are barely hanging in there. In addition, tens of millions of elderly Americans live on fixed incomes. Meanwhile, property taxes just continue to go up in many areas of the United States.
Unless the U.S. economy experiences a dramatic turnaround, we are going to continue to see large numbers of Americans get behind on their property taxes, and the big banks will continue to be there to scoop up the tax liens.
Large numbers of poor and elderly Americans that don't even have a mortgage will lose their homes and it will all be perfectly legal. Executives at the big banks will be having a good laugh about their huge bonus checks as thousands upon thousands of our most vulnerable citizens are dumped out into the street.
But weren't the big banks largely responsible for causing the housing crash and the economic meltdown that followed?
But so far none of them is really paying any kind of a price. The big banks got bailed out by the U.S. government, and now it looks like the Federal Reserve is preparing another round of backdoor bailouts to help them out again.
But do the big banks show any mercy on the poor and the elderly who have gotten behind on their property taxes?
Not at all.
This is 2010 a time when greed dominates the financial world and when most banks don't seem to know a thing about kindness or mercy.