Tuesday, October 26, 2010

The Horror of Major Banks Masquerading to Foreclose Homes as Tax Lien Collectors

Around five years ago some web site was advertising a way to make a good investment by purchasing property tax liens from city government auctions on home owner's default payments.  Basically the process goes something like this. A home owner's tax lien (i.e., unpaid overdue property taxes) gets purchased through the city government's on-line auction. Such purchaser then hikes up the cost to the homeowner to make a profit. The homeowner thereby doesn't get foreclosed on due to the intervention and the city gets much needed cash in its coffers through the auction.  Sounds great for everyone involved, right? Not so much. 

As with anything, there comes a catch for the homeowner and a near fatal one in many cases. The law enables someone to make as much as 18% on the investment. More greedy individuals might tack on additional fees dooming the homeowner to foreclosure. I eventually bought the tax lien information on a CD-ROM but later discarded it when I learned it meant people who didn't pay could be foreclosed on.  It seemed a sleazy practice and it turned out I was right.

The Huffington Post recently did an extensive story The New Tax Man: Big Banks and Hedge Funds on how predatory major banks are feasting on the tax lien collection practices having opened up hundreds of sub-companies like  Tower Capital Management LLC.  These vulture banks are operating through these rather fake companies to purchase tax liens in bulk from cities. The companies then hike up ridiculous fees to home owners who are already struggling to pay their property taxes. Many of these homeowners are victims of recent unemployment and have owned their homes for decades.  These banks are then foreclosing on these people's homes!

Note in this video at one point the bill to the homeowner has a $1,500 attorney fee from the LLC sub tax lien banking institution!  Sleaze!

This video from the Huffington Post is outstanding and shows true journalism in fishing out the major banks are behind these predatory practices.  Heartless, soulless major banking institutions have masqueraded themselves behind thousands of "LLC" sub companies.  Many of these sub companies have no office or just a PO box in order to feast off the pain of the delinquent tax homeowner.

What's nauseating is that these are the same banks that we the tax payers recently bailed out, who are granting large bonuses to themselves. The banks are out en masse in a feeding frenzy like parasites foreclosing on people's longstanding properties for unpaid property taxes.  Some of the original overdue taxes amounted to only a couple hundred dollars ballooning into thousands of dollars

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