Cryptocurrency: Rising To Downsize Theft Of Equity

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12 States Allow Home Equity 'Theft' Over Homeowners' Tax Payment
Shortfalls, Study Says

https://www.theepochtimes.com/12-states-allow-home-equity-theft-over-homeowners-tax-payment-shortfalls-study-says_4945129.html

https://alec.org/model-policy/statement-of-principles-on-ending-home-equity-theft/

https://homeequitytheft.org/size-and-scope

https://www.supremecourt.gov/DocketPDF/22/22-160/233950/20220819091504898_Fair%20PWC%20pdfa.pdf
https://www.supremecourt.gov/DocketPDF/22/22-237/237523/20220909120626309_Nieveen%20PWC%20final.pdf
https://www.supremecourt.gov/DocketPDF/22/22-166/233999/20220819120827692_Tyler%20PWC%20Final.pdf

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.

Nine other states—Alaska, California, Idaho, Montana, Nevada, Ohio,
Rhode Island, Texas, and Wisconsin—safeguard home equity in the
foreclosure process but provide loopholes that permit governments or
private entities to capture excess equity value that PLF says should
belong to the homeowner.

These laws allow government officials and investors to take homes that
have been in families for generations and leave some people homeless
over tax debts that, in some cases, work out to less than 1 percent of
their property’s value, according to PLF.

In one case, a county in Michigan seized a man’s house over an $8.41
underpayment, leaving him with nothing. The report notes that in the
end, the homeowner prevailed when the Michigan Supreme Court
determined that the county had acted unconstitutionally.

PLF takes the position that these so-called tax-and-take transactions
violate the Fifth Amendment, which prevents the government from taking
property without just compensation, and the Eighth Amendment, which
bans excessive penalties.

Some government treasurers’ organizations, counties, and tax lien
investors who “personally profit off the system in some of these
states” are in favor of laws that lead to home equity theft, Christina
Martin, a senior attorney at PLF, told The Epoch Times.

“Everybody else seems to be against it—groups on the left, right,
[and] center,” she said.

“The vast majority of people seem to be against this. And most people
actually have no idea this is even happening.”

The American Legislative Exchange Council (ALEC), an alliance of
conservative lawmakers, is opposed to home equity theft. Laws should
be changed to require surplus profits to be returned to a home’s prior
owner after a “tax lien investor or county collects what it is due and
any other debts or levies on the property are paid,” ALEC says.

The Epoch Times reached out to the Government Finance Officers
Association, the National Governors Association, and the National
Conference of State Legislatures for comment but had not received a
reply from any of the three organizations as of press time.

PLF currently has three home equity theft-related petitions from
homeowners pending before the Supreme Court, all of which are
scheduled to be considered by the justices on Jan. 6, 2023.

Two are from Nebraska. One petition (pdf) is Fair v. Continental
Resources, court file 22-160, and the other (pdf) is Nieveen v. Tax
106, court file 22-237. A petition (pdf), Tyler v. Hennepin County,
court file 22-166, is from Minnesota.