Truth vs Fiction in the Media about Tax Lien Certificates

Truth vs Fiction in the Media about Tax Lien Certificates
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One thing that bugs me about as much as hyped-up, promotional websites trying to sell you the perfect “system” to buying tax lien certificates is the media’s take on tax lien investors.  There’s a recent article that was released by the AP based on a report by the National Consumer Law Center (see the article here).  First, the title of the article indicating that people are losing there homes for $400 is total BS.  Really?  If I could simply buy tax lien certificates for $400, wait a few months, then get a good condition house and make tens of thousands of dollars, I’d do it in a heartbeat.  

But, it’s simply not true.

At all.

Here’s what I’m talking about:

Report: Some lose homes over as little as $400

“The elderly and other vulnerable homeowners are losing their homes because they owe as little as a few hundred dollars in back taxes, according to a report from a consumer group.

Outdated state laws allow big banks and other investors to reap windfall profits by buying the houses for a pittance and reselling them, the National Consumer Law Center said in a report being released Tuesday.

Local governments can seize and sell a home if the owner falls behind on property taxes and fees. The process helps governments make ends meet at a time when low property values and the weak economy are squeezing tax revenue.

 But tax debts as small as $400 can cause people to lose their homes because of arcane laws and misinformation among consumers…”

Look…The average redemption period for a a tax lien certificate is 2-3 years.  Since most tax liens are sold for the past year’s taxes, the homeowner would have not paid taxes for 3 years or more.  Then, there’s usually a tax deed or quiet title process which takes another six months.  During that entire time, the homeowners are receiving delinquency notices from the county, required noticing from the tax lien investor, or they are being served in person with the legal documents clearly stating that the house is being foreclosed on for taxes.  Yes, the initial delinquent bill might have been $400, but in order to lose the home, you’re talking about years worth of taxes.

Here’s my reader challenge:

If you can show me a situation where an “elderly or vulnerable” homeowner lost a house for only $400 in delinquent property taxes (I won’t count legal fees), I’ll give you the floor and let you write an article about it, front page on my blog. 

11 Responses to “Truth vs Fiction in the Media about Tax Lien Certificates”

  1. Teresa Walker says:

    I would like to know can you buy a lien for 1-2 years if they don’t pay them? I am not looking to buy the home.So can i buy the same lien for 2 years and not buy it the 3rd year.

Leave a Reply to Teresa Walker