Homeowners in more than 30 towns and villages in Massachusetts have collectively lost an estimated $ 97 million in equity through foreclosures over a six-year period, according to a new study from the libertarian Pacific Legal Foundation.
The losses are in part the result of an unusual policy that allows homeowners to lose everything, including any remaining equity in their home, in tax lien foreclosures in Massachusetts Land Court. Massachusetts is one of 12 states that allow this type of locking system.
The California-based legal organization calls the policy unconstitutional, citing a clause in the United States Constitution that prohibits the government from taking private property for public use without fair compensation. The group’s report reflects criticism from local housing advocates and some lawmakers, who have tried for years to reform state laws.
âThe government should protect private property, not allow state-authorized theft,â the Pacific Legal Foundation report said. “When governments (or their agents) take a property, sell it, and hold onto all the proceeds – beyond what is owed on a debt related to that property – they are stealing money from some of the most vulnerable residents. of the Commonwealth. “
Several state lawmakers have proposed bills to overhaul tax lien laws, including better notice to landowners of their debt and explicit language on how the process can lead to equity participation in the land. both by municipal tax collectors and by private companies that buy back debts. then sue for foreclosure against the owners.
Forcelosures are not just the result of non-payment of a mortgage. Property owners can also be forced to default due to unpaid property taxes or even water or sewer bills.
The Massachusetts Collectors and Treasurers Association has always resisted reform bills, arguing that they would be expensive and complex for municipalities to implement.
Christopher Sweet, city of North Attleboro treasurer and collector and chairman of the state association, told GBH News he was open to talking about changes in state law, but said the Pacific Legal Foundation had exaggerated the scale of the problem.
âIt sounds dramatic and it’s terrible – people are losing their homes and being foreclosed – but it’s not as widespread a problem as they describe in the report,â Sweet said. He said a small fraction of the state’s millions of homeowners have lost property to six-year tax lien foreclosures.
But local critics and the foundation argued that vulnerable homeowners are most likely to lose in such cases.
“It almost exclusively affects low-income people and the elderly who are housing rich and money poor,” said Todd Kaplan, consumer and housing lawyer at Greater Boston Legal Services. âWhen we see the number of people who have actually lost their homes, these are vulnerable peopleâ¦ and that’s why they lost their homes. ”