The Other Foreclosure Crisis

Property Tax Lien Sales


Local governments are facing financial pressures that necessitate a steady stream of tax revenue. Yet, many homeowners have been negatively affected by the difficult economic times. This report looks at ways in which local governments can assist homeowners who justifiably have payment problems, without also increasing the cost of collection or limiting tax revenues. Most importantly, property tax collection procedures should encourage repayment rather than property loss, and they should not provide an opportunity for speculators to gain huge profits off homeowners in distress.

lien-report-coverDownload the full report (PDF)
Download the Executive Summary (PDF)
Download the full set of recommendations for states and local governments (PDF)
Read stories about real people who have lost their homes due to small tax liens (PDF)
Download a Summary of State Tax Laws chart (PDF)
Download the press release (PDF)

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Why are elderly and disabled homeowners especially vulnerable? By AARP Senior Attorney Jean Constantine-Davis
Numbers of homes with tax lien sales in various cities

Related NCLC Amicus Brief: In re: MA tax lien foreclosure cases, MA Land Court, Dec. 14, 2012
Published July 10, 2012
© National Consumer Law Center

Related Publications

arrow Attorneys: Foreclosures
arrow Housing Counselors: Foreclosure Prevention Counseling
arrow Consumers: Surviving Debt

Overview

All states have laws that permit local governments to sell property through a tax lien foreclosure process if the owner falls behind on property taxes or other municipal charges.

A tax lien sale may be started over nonpayment of a tax bill of only a few hundred dollars. A $200,000 home may be sold at a tax lien sale for $1,200 and then quickly resold for a huge profit.

Homeowners may lose not only a homestead but also hundreds of thousands of dollars in equity. This equity may represent their sole savings and security for retirement. As a result, foreclosures related to tax lien sales may destabilize entire communities.

Scope of Problem

Key Recommendations

The following recommendations reflect the goals of preserving homeownership and ensuring prompt payment of local taxes.

State Recommendations

Recommendations for Cities and Towns