Sergeant Benny Coleman, decorated, retired U.S. Marine Corps, is 76-years old and suffering from dementia. A Vietnam veteran, Benny had lived in his brick home at 221 44th St. N.E., Washington D.C, near the Maryland border for decades. When his wife died in 1988, he paid off his $57,500 mortgage from the life insurance he received from her death.
Benny kept his little brick home neat, and liked to sit out on the front porch, talk with neighbors and enjoy his retirement years.
Benny began to forget things, like buying food or going to doctor’s appointments. In 2006, Benny forgot to pay a $134 tax bill. The city eventually placed a lien on his home and added $183 in interest and penalties bringing the bill to $317.
As Benny’s health faded, his son moved back to town, and in with his dad. Benny Jr. soon discovered the unpaid tax bill and lien. The son paid the $317 tax bill but an investment company had bought the Tax Lien Certificate (TLC).
Benny’s home, now worth $197,000 was being charged double-digit interest on the $317 tax lien. The Maryland investment group who bought the TLC demanded $4,999 – 37 times the original bill. This investment group was legally allowed to charge unlimited legal fees and court costs. The investment company foreclosed on Benny’s home.
Benny’s son paid $700 of the $4,999, but could not pay the rest. The son wrote to the court, explaining his father didn’t understand the ramifications of the $134 tax bill. The letter didn’t help.
Late last year, right before the holidays, Benny was evicted from his house. He sat in a lawn chair across from his home and watched as armed federal US Marshals took his possessions outside and boarded up the home. He kept saying “I have nothing”. The investment group sold the house for $71,000 two months later. Benny now lives in a group home a mile from his former house.
There were over 13,000 property tax liens sold to investors in the Washington D.C. area alone during a 7-year period. More than one-third were liens less than $1,000. Almost all occurred in distressed areas of the old and the poor.
Between $7 billion and $10 billion in property taxes go delinquent each year. Thirty states and Washington D.C. allow the sale of TLC’s. Colorado is one of those thirty states. Foreclosed homes often have tax debt. Individuals, and more recently large investment groups are buying up these delinquent tax debts.
Investors buy the unpaid tax bills, place a lien against the owner’s property and have all rights to charge high interest rates to the property owner. If the property owner doesn’t pay the taxes, interest and penalties, the state gives the TLC owner the right to the property, wherein the TLC owner can take possession (foreclose). Although rare in Colorado, the investor is allowed to foreclose. Lenders of mortgaged properties tend to pay off the lienholder in order to protect their interest, but in cases like Benny’s where there was no mortgage, the investor had the upper hand.
Keith A. Gantenbein, Jr. is a licensed, Colorado foreclosure defense attorney and real estate attorney located in Denver and servicing all of Colorado. His foreclosure defense practice includes foreclosure prevention, judicial foreclosure, HOA foreclosures, foreclosure assistance, loan modifications, short sales, and all other foreclosure defense legal assistance. He also defends homeowners against HOA claims in HOA lawsuits, including defense against HOA covenant enforcement in Colorado. Keith also handles residential real estate closings, title issues, lien issues, quiet title, real estate contracts, bankruptcies, mortgage negotiations, lender liability, real estate, civil litigation, contracts and landlord/tenant.
If you think you will be facing foreclosure, or are in the foreclosure process, or have had a wrongful foreclosure, or have a real estate or HOA issue, contact Colorado foreclosure defense attorney Keith Gantenbein at (303) 618-2122 for a one-hour consultation where he will discuss your situation and go over all your options with you.
Gantenbein Law Firm is a Colorado law firm, focusing on Colorado foreclosure defense, Colorado HOA defense, Colorado Business Law, Credit Dispute and Repair, and Colorado Wills & Trusts. For more information regarding these practice areas, please visit our website: www.gantenbeinlaw.com
Gantenbein Law Firm also specializes in Federal and Colorado Tax Law. Our Denver tax attorney is experienced in IRS liens, IRS audits, tax planning, IRS tax levies, IRS installment plans, IRS offers in compromise, IRS repayment plans, tax litigation, IRS tax appeals, and more. If you are facing an IRS tax issue or need tax planning, contact our Denver tax attorney at 303-618-2122, or visit our website here.