Tag Archives: Home Equity Theft

New England Farmer Sues Town for ‘Home Equity Theft’ In Federal Court, by Matthew Vadum

This is blatant theft. From Matthew Vadum at The Epoch Times via zerohedge.com:

After a town in central Massachusetts seized dramatically more than what a farmer owed in property taxes, the farmer is suing the town in federal court for alleged “home equity theft.”

Alan DiPietro in an undated photograph at his alpaca farm in central Massachusetts. (Courtesy Pacific Legal Foundation)

Alpaca farmer Alan DiPietro, an engineer by training who lives outside of Worcester, filed suit (pdf) earlier this month against the town of Bolton, claiming that the seizure constitutes an unlawful taking of his property in violation of the Massachusetts Constitution and the Fifth Amendment to the U.S. Constitution.

When Bolton took DiPietro’s home in December 2021, it had a market value of at least $370,000. The town subtracted his debt of about $60,000 and pocketed the remaining approximately $310,000 in equity.

Massachusetts law permits the government to keep the excess amount. The Pacific Legal Foundation (PLF), which is representing DiPietro, calls this home equity theft. Twelve states and the District of Columbia allow local governments and private investors to seize dramatically more than what’s owed from homeowners who fall behind on property tax payments, according to the PLF, which issued a December 2022 report on the practice, The Epoch Times reported.

The U.S. Supreme Court will soon take up the issue of home equity theft in a PLF case.

On Jan. 13, the court agreed to hear Tyler v. Hennepin County, Minnesota, the appeal of a 94-year-old homeowner who’s challenging the constitutionality of laws that allow local governments to take the full value of a home as payment for much smaller property tax debts. The county seized Geraldine Tyler’s condo, valued at $93,000, and sold it for just $40,000. Instead of keeping the $15,000 it was owed, the county retained the full $40,000, amounting to a windfall of $25,000, according to the PLF. A date for the hearing has yet to be determined.

DiPietro had been raising alpacas and marketing their fleece since 2008 in Bolton, a town in the Nashoba Valley region. But by 2014, he needed more land, so he purchased 34 undeveloped acres situated in Bolton and the neighboring town of Stow. He mowed the existing fields and put up fencing and some small structures, unaware that Bolton would claim that the improvements required local permits.

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12 States Allow Home Equity ‘Theft’ Over Homeowners’ Tax Payment Shortfalls, Study Says, by Matthew Vadum

Say you owe $1000 in property taxes and you have $50,000 in home equity. In some states if the government forecloses on your home, they keep the $50,000, not just the $1000 their owed. From Matthew Vadum at The Epoch Times via zerohedge.com:

Twelve states and the District of Columbia allow local governments and private investors to seize dramatically more than what is owed from homeowners who fall behind on property tax payments, according to a new report.

Christina M. Martin, senior attorney at Pacific Legal Foundation, in a file photo. (Courtesy of Pacific Legal Foundation)

The practice, which Pacific Legal Foundation (PLF) calls “home equity theft,” is documented in what the organization bills as the first national study aimed at exposing “the injustice of home equity theft through tax foreclosure.”

“Our findings are alarming,” PLF’s strategic research director, Angela Erickson, said in a statement.

Home equity theft is robbing thousands of people of their homes and all the equity they’ve built. A system that allows governments and private investors to take more than what is owed creates a perverse incentive to work against the homeowner—not with the homeowner—to get the tax debt paid.”

Homeowners lost more than $777 million in life savings on more than 5,600 homes, based on their market value, in transactions that took place from 2014 to 2021. The true total is probably higher because statistics from New York state and some statistics from the other states studied were not available. On average, homeowners lost 86 percent of their equity, the study found.

Government entities, which often unload properties for a fraction of their market value, collected an estimated $26 million more than they were owed on about 1,300 homes. At the same time, private investors, who purchase tax liens, took in about $250 million more than what they were owed on about 2,600 homes.

Alabama, Arizona, Colorado, Connecticut, Illinois, Maine, Massachusetts, Minnesota, Nebraska, New Jersey, New York, Oregon, South Dakota, and the District of Columbia have laws on the books that let local governments and private investors “steal” substantial amounts of home equity from homeowners who are late on their property taxes, according to PLF.

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Home Equity Theft: How a Man’s Home Was Seized Over $8.41 in Unpaid Taxes, by Brittany Hunter

Here’s a criminal scam that’s not illegal because it’s being perpetrated by governments. From Britanny Hunter at fee.org:

For three years, the pair scrimped and saved in order to fix up the four-unit property. On the weekends, Ramouldo would spend his days off making the 11-hour drive from New Jersey to Michigan to work on the house, making the much-needed repairs himself. In addition to the small complex, the family had purchased a small home next door. The plan was to renovate and rent out each unit and then use that money to help Ramouldo retire and move his family to the small home in Michigan, where the rest of their extended family resides.

Erica, who had seen her father work long hours and sacrifice to provide for her family over the years, was happy to help her father buy the property. She was eager to begin building her own financial legacy and saw the property as an excellent investment opportunity.

These plans were derailed, however, when their property was seized by Wayne County, Michigan, in 2017 and sold to a private buyer.

All because they unknowingly underpaid their tax bill—by $144.

While the father and daughter had been paying their property taxes diligently for each year they owned the property, in 2014, they unintentionally underpaid by $144. Neither knew about this miscalculation or the situation could have quickly been remedied. And without knowledge of this outstanding debt, the small amount grew as the county tacked on interest charges to the tune of $359.

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