Wednesday, February 25, 2015

Lisbon Could Take A Lesson From Millinocket Maine

Cities, not just banks, are pursuing foreclosures

Desperate for revenue, more cities and counties are proceeding with tax foreclosures when residents fall several years behind on their property taxes.
By Julie Masis JANUARY 22, 2010

Rebecca Cook/Reuters/File
Michael Rady worked at the docks for 15 years to pay off the mortgage on his Cleveland home.

But when Mr. Rady was injured and could no longer do physical labor, he couldn’t find a job and had to live off savings and credit cards. Soon, he owed Cuyahoga County close to $8,000 in property taxes, and the county treasurer sent him a foreclosure notice: His house would go to auction in February.

Nationwide, many counties and cities faced with declining revenues are turning to tax foreclosures – when a homeowner is evicted due to unpaid taxes rather than an unpaid mortgage. For the most part, local officials see tax foreclosures as a necessary evil. But in some cases, tax foreclosures appear to be spiraling out of control, threatening the health of cities. Cuyahoga County, for instance, has recently reversed course and imposed a moratorium on tax foreclosures for the first time since the Depression.
Recommended: Could you pass a US citizenship test?

In pursuing tax foreclosures, “We’re lowering the prices [of homes] and contributing to wealth destruction,” says Treasurer Jim Rokakis.

It can be a wrenching decision. One Mainetown is allowing delinquents to stay in their property penalty-free to avoid throwing people out of their homes. But, in many cases, it is local politics that rules the day: Tax foreclosures are most common in municipalities where treasurers are appointed.

Anecdotal evidence from across the United States suggests that tax foreclosures are rising.

•Shirley, Mass., reinstated tax foreclosures after cuts in state aid forced it to lay off more than half its firefighters and shift town employees to a four-day workweek. The last time Shirley made tax foreclosures was 50 years ago. Now, 130 taxpayers in a town of 7,904 owe more than $1.3 million in back taxes and interest, some going back to the 1950s, says Treasurer Kevin Johnston.

“We’re going broke,” adds Shirley selectman Enrico Cappucci, who supports tax foreclosures.

Millinocket, in central Maine, does not evict anyone. The number of people who lost titles to their homes because they did not pay their taxes doubled or tripled in recent years, says Town Manager Gene Conlogue. But the town did not throw anyone out.

“We have a policy that requires them to pay rent, but we generally waive that,” Mr. Conlogue says. “We’re not trying to add to people’s problems.”
Read more

Editors Note: If Millinocket can do it why can't we?

No comments:

Post a Comment