In Massachusetts, when homeowners fall behind in their property taxes, cities and towns can foreclose and take ownership of the entire property. We’re among just 12 states in the nation to engage in this practice.
Municipalities are then free to sell the home, keeping all of the profits – even if the amount greatly exceeds the back taxes owed. My bill, An Act protecting equity for homeowners facing foreclosure, which I share with Representative Jeff Roy, ends this process in the Commonwealth.
The bill provides that any equity remaining beyond the tax debt will be paid to the homeowner/taxpayer. The bill also improves the notice system to warn taxpayers in advance that they may lose their home.
The Pacific Legal Foundation reported that 254 Massachusetts homeowners lost a collective $60 million in home equity from 2014-2020 when municipalities foreclosed and sold their homes over tax debts as small as $2,004.02. Massachusetts homeowners of another 154 homes lost $37 million after municipalities sold their tax liens to private investment group Tallage, which foreclosed and sold the homes while keeping the value over and above what was owed.
More from the Pacific Legal Foundation here: https://homeequitytheft.org/massachusetts.
I learned about this issue from constituents in Greenfield who lost their home and raised this issue with me directly during a community meeting at the Greenfield Library. Greenfield advocate Al Norman also approached me, joined by the Greenfield City Council and Greenfield Mayor, all offering strong support for an end to this practice.
