The Supreme Court Takes Up 'Home-Equity Theft' - WSJ

[question everything]

Geraldine Tyler never thought she’d end up in front of the U.S. Supreme Court—especially at 94. But she also never imagined the government would seize her Minneapolis home and sell it. Ms. Tyler is a victim of what’s often called home-equity theft, but this form of robbery isn’t criminal; in fact, it’s legal in a dozen states. The Supreme Court, which hears oral arguments Wednesday in Tyler v. Hennepin County, has the opportunity to end these predatory tax foreclosures once and for all.

Ms. Tyler’s trouble began when she moved into a senior residence in 2010 and fell behind on her property taxes. She ended up owing Hennepin County roughly $2,300. After tacking on penalties, interest and related costs, her debt ballooned to $15,000. To collect what it was owed, Hennepin County seized and later sold the one-bedroom condo for $40,000. You might think the county would settle the $15,000 debt and return the $25,000 balance to Ms. Tyler. But the county took all $40,000 and left her with nothing to show from her only significant asset.

Most states treat property-tax collection like other debts, only taking as much as the government is owed. But Minnesota is one of 12 states, plus the District of Columbia, that regularly take a windfall when collecting delinquent property taxes. Several more states that typically protect property-tax debtors have created special loopholes that allow the government to take a windfall so long as it uses the property for public purposes.

As a result, thousands of owners are robbed of their equity every year. A recent study by Pacific Legal Foundation found that governments seized at least 8,950 homes between 2014 and 2021. That’s only the tip of the iceberg since the study could only examine a limited sample of foreclosures in these states. The total losses suffered by the debtors—usually elderly, sick or poor—are shocking. In Massachusetts alone, the government took $56 million in equity between August 2013 and July 2014, according to research by University of Massachusetts law professor Ralph Clifford.

More..

https://archive.is/WDIa4

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I don't know why Minnesota has to be one of the 12 states to follow this harsh treatment

[BlueWaveNeverEnd]

1. who are the monsters who develop these financial theft policies?

[BlueWaveNeverEnd]

2. Clarence Thomas will be the one vote for the equity robbery to continue

my prediction

[Native]

3. I had no idea this was going on....

So, if you get super sick, wind up in the hospital, rack up insane hospital bills because our Healthcare System sucks, instead of focusing on getting better, you have to deal with this bullshit!

[Native]

4. Link to Forbes article with more on this (and a map of how this plays out in our nation).

https://www.forbes.com/sites/adammillsap/2023/01/20/supreme-court-has-chance-to-end-home-equity-theft/

[Native]

5. Can someone clear this up for me?

The WSJ article cites a Michigan case as an example of this theft, but this Forbes article refers to Michigan (see map) as a state that protects home equity. I'm so confused. https://www.forbes.com/sites/adammillsap/2023/01/20/supreme-court-has-chance-to-end-home-equity-theft/

[question everything]

6. I think that the Forbes map is wrong

An 83-year-old retired engineer in Michigan underpaid his property taxes by $8.41. In response, Oakland County seized his property, auctioned it off to settle the debt, and pocketed nearly $24,500 in excess revenue from the sale.

Under Michigan law, it was all legal. And hardly uncommon.

https://reason.com/2019/11/06/a-michigan-man-underpaid-his-property-taxes-by-8-41-the-county-seized-his-property-sold-it-and-kept-the-profits/

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8. OK, Michigan mended its ways - George Will

Michigan has mostly mended its ways since a county pocketed $24,500 from the sale of an octogenarian’s home seized because of his $8.41 tax underpayment, and a court frowned on government’s unbounded power to confiscate.

https://www.washingtonpost.com/opinions/2023/04/24/minnesota-home-equity-theft-supreme-court-case/

[question everything]

7. More: Appellate court rejected the case, but a conservative group came to the rescue.

From a Strib January editorial

Tyler's case was dismissed in federal district court, and an appellate court upheld that ruling, affirming that Minnesota could legally redefine Tyler's private home as public property, allowing the government to keep the excess value.

Pacific Legal Foundation, a conservative nonprofit that specializes in "individual and economic liberty," is representing Tyler pro bono.

At the time of that decision, Christina Martin, senior attorney at Pacific Legal Foundation, commented, "We believe that Hennepin County violated Ms. Tyler's rights by taking a huge windfall at her expense." The foundation noted in its 2022 report that 12 states and Washington, D.C., allow local governments to take more than the amount they are owed in back taxes. Based on a review of property tax records, Pacific Legal contends that from 2014 to 2020, an estimated 1,200 Minnesotans lost their homes and all equity for debts that averaged 8% of the homes' value.

(snip)

The effort by counties to collect delinquent taxes can be prolonged. Dan Rogan, assistant county administrator for resident services, responded to a Star Tribune reporter's questions in a recent email, nothing that "when a property owner fails to pay taxes and does not avail herself of the numerous ways to remedy the deficiency — including selling the property, using the sales proceeds to pay the tax and keeping any surplus — the state's retention of the surplus is not an unconstitutional taking nor is it an excessive fine." Rogan in other statements to media noted that property owners are given three years to resolve unpaid taxes.

The county's practice may well be constitutional. That will be for the Supreme Court to decide. But there is another question here. Is it right? Is it fair dealing with someone so hard up that they can't pay taxes to take all the equity in their home, far in excess of what they owed?

https://www.startribune.com/heartless-state-law-headed-to-high-court/600246525/