Watch: Water Bills, Tax Liens and the Dispossession of the Poor
In this video by Huffington Post Investigative Fund, we learn the story Vicky Valentine who had her home seized by Sunrise Atlantic LLC, an arm of Bank Atlantic, because of an unpaid water bill of $362. Ms Valentine's bill was owed to the City of Baltimore, which then sold the right to collect on the bill to a series of banks and real estate companies (third party investors) in a tax lien auction that quickly inflated the bill to over three thousand dollars. Investors then seized the home and put Ms Valentine and her family on the street. As the video details, this is a growing practice between strapped city governments and private investors (usually banks) which is dispossessing the poor and working class of their property.
It would be good to find out if this practice is going on in Philadelphia and if so how it is operating.
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REal Estate Taxes and Water bills in Philly
Well, philly residents who are behind in their real estate taxes and water bills can also face foreclosure!. In an aggressive measure to collect taxes the City of Philadelphia now has TWO collection Agents. These special agents are Law Firms (Linebarger, Goggan, Blair & Sampson and the GRB). Thousands of residents who are behind in their taxes are receiving collection letters from one of these two agents as well as the City's Law Department. Homeowners are also sued in Municipal Court. Facing collection action and foreclosure, low income homeowners can apply for payment agreements.
The payment agreements are affordable (based on income) but, the devil is in the details in these low agreement contracts. The contracts they are signing contain a "stipulated judgment".
If a homeowner defaults, The city will have an automatic judgment and the homeowner is now in deeper peril, because this allows the city to take the homeowner to sheriff sale more quickly. Unwittingly, homeowners are signing away some of their rights, such as to file bankruptcy or petition the Tax REview Board for the abatement of Penalties and Interest. ALso, interest and penalties continue to accrue and the low monthly payment they are now paying barely touches the principal, let alone the mounting interest and penalties.
These minimal payment can make it nearly impossible to ever pay off your back taxes. But, low income homeowners can't pay much more given the rising utility costs. Also, some uninformed homeowners just pay the agreement amount which covers only portion of the outstanding tax balance and they don't understand that they still have to pay annual taxes as they become due. If this is the case the City can still put the homeowner in collections for that balance.
A payment agreement might be all the homeowner can do to stop or slow down collections or in other cases stop the property from going to sale. But, in the long run if the homeowner can only afford to pay the minimum amount required its likely that they will never fully realize a satisfied debt.
Joyce
This seems like a pretty important issue to organize around. Do you have ideas of what we should/could be doing. How do we get some information on this and then organize around it?