ON BEACON HILL TO CHANGE THE LAW. AND AFTER MONTHS OF INACTION, BEACON HILL LAWMAKERS SAY THEY’RE FINALLY MAKING PROGRESS TOWARDS CHANGING MASSACHUSETTS PRACTICE WHEN IT COMES TO HOMEOWNERS WHO HAVE FALLEN BEHIND ON THESE PROPERTY TAXES. BUT SOME SAY THE NEW BILL DOESN’T GO FAR ENOUGH TO PROTECT RESIDENTS FROM POTENTIAL LOSING EVERY THOUSAND $30,000. I HAVE THIS RECENT HOME AUCTION IN WESTERN MASSACHUSETTS SEEMED LIKE BUSINESS AS USUAL, BUT THE SELLER OF THIS HOME WASN’T A BANK OR EVEN A TOWN. THE SELLER WAS BROOKS LLC, A COMPANY THAT BUYS TAX TITLES FROM MUNICIPALITIES OF PROPERTY THAT HAVE FALLEN BEHIND ON THEIR TAXES. THE FORMER OWNERS OF THIS WARE HOME OWED JUST UNDER $15,000 IN UNPAID TAXES. TALLACH BOUGHT THE LYNN FROM WARE AND IN 2023 THEY FORECLOSED ON THE HOME, THEN SOLD IT AT A PUBLIC AUCTION. THIS MONTH. THEY’RE BIDDING AND FEAR SELLING ANY ADVANCES OVER $40,000. YES OR NO? NO. SOLD FOR $40,000 TO BIDDER NUMBER 75, WITH A SALE PRICE OF $40,000. NEARLY. $15,000 IN TAXES OWED, AND MORE THAN $6,300 IN LEGAL AND COURT FEES, IT APPEARS TALLACH CLEARED MORE THAN $18,000 IN PROFIT ON THIS PROPERTY. UNTIL NOW, CITIES, TOWNS AND EVEN PRIVATE COMPANIES LIKE TALLACH COULD TAKE HOMES WHERE TAXES WERE OWED, SELL THEM AND POCKET THE PROFITS. IT’S A PRACTICE KNOWN AS EQUITY THEFT AND LAST YEAR, THE U.S. SUPREME COURT RULED IT UNCONSTITUTIONAL. BUT WITHOUT ACTION FROM THE LEGISLATURE. MASSACHUSETTS HOMEOWNERS HAVE BEEN IN A STATE OF LIMBO. THEN LAST MONTH, A HAMPDEN COUNTY SUPERIOR COURT JUDGE RULED THE STATE LAW, PERMITTING THIS PRACTICE WAS ALSO UNCONSTITUTIONAL. THE COURT DECISIONS MADE IT IMPERATIVE. CHAIR OF THE JOINT REVENUE COMMITTEE. STATE SENATOR SUSAN MORAN SAYS THE LEGISLATURE IS FINALLY MOVING FORWARD. IT IS THE BILL THAT PREVENTS EQUITY THEFT FOR HOMEOWNERS. HER COMMITTEE’S BILL WOULD INCREASE REQUIREMENTS FOR NOTIFYING HOMEOWNERS THAT THEY’RE IN DANGER OF FORECLOSURE. AND IF A FORECLOSURE DOES TAKE PLACE, EXCESS PROFITS WOULD BE HELD FOR 18 MONTHS WITH INTEREST FOR HOMEOWNERS TO CLAIM LOTS OF TIMES, CONSUMERS THAT WERE IN FINANCIAL TROUBLE REALLY HAD NO IDEA OF WHAT WAS HAPPENING, WHAT THE NEXT STEPS WERE. THEY WOULD JUST GET A NOTICE THAT THEIR HOME WAS GONE. BUT SOME ARE CONCERNED THE BILL CONTINUES TO INCLUDE PRIVATE COMPANIES IN A PROCESS THEY BELIEVE SHOULD ONLY BE BETWEEN CITIZENS AND GOVERNMENT. IT DOESN’T REALLY MAKE SENSE TO ME THAT THE LEGISLATURE WOULD COME UP WITH A ONE FITS ALL FIX THAT PUTS THE PRIVATE COMPANIES IN THE SAME FOOTING AND IN THE SAME PLACE AS MUNICIPALITIES. THEY NEVER HAVE BEEN. THEY’RE NOT. THEY DON’T BELONG THERE. PETER BROWN IS AN ATTORNEY WHO WORKS WITH MUNICIPALITIES ON TAX RELATED ISSUES. I THINK THE PROBLEM IS THAT WE’VE SEEN IN SOME OF YOUR STORIES THAT WE’VE SEEN IN SOME COURT CASES, I THINK WOULD GO AND BE PERPETUATED. I THINK IT WOULD BE TRAGIC. BOTH OWNER AND LAWYER DECLINED TO COMMENT ON IF THEY WERE CHANGING THEIR BUSINESS PRACTICES, OR WHAT THEY PLAN TO DO WITH THE PROFITS FROM THE AUCTION AND WHERE. BUT BROWN SAYS IF A CITY, TOWN OR PRIVATE COMPANY KEEPS THE PROFITS FROM SUCH A SALE AND THEY’RE GOING TO PROBABLY FIND THEMSELVES IN A IN A LAWSUIT AND THEY’D BE VIOLATING THE UNITED STATES CONSTITUTION. NOW, THE FORMER HOMEOWNER OF THE HOME IN WARE PASSED AWAY IN DECEMBER. WE REACHED OUT TO HIS FAMILY MEMBERS, BUT DID NOT HEAR BACK. NOW, ATTORNEY BROWN ISN’T THE ONLY ONE VOICING CONCERNS ABOUT THE BILL. NEW BEDFORD SENATOR MARK MONTIGNY, WHO’S BEEN FIGHTING FOR YEARS TO HELP END HOME EQUITY THEFT, HAS AN AMENDMENT HE SAYS WILL HAVE MORE PROTECTIONS FO
Advertisem*nt
As auctions continue, Mass. lawmakers poised to address home equity theft
A recent home auction out in the Western Massachusetts town of Ware seemed like business as usual.However, the seller was neither a bank nor the town, but rather Tallage Brooks, LLC, a company that buys tax titles from municipalities of properties that have fallen behind on their taxes.The practice is commonly referred to as equity theft, and despite the Supreme Court ruling it unconstitutional a year ago, the law in Massachusetts hasn't changed. But this week, Beacon Hill lawmakers are finally making progress towards changing policies when it comes to homeowners who have fallen behind on their taxes. Some are wondering, however, if the new bill goes far enough to protect residents from potentially losing everything.The former owners of the Ware home owed just under $15,000 in unpaid taxes. Tallage bought the lien from Ware, and in 2023, they foreclosed on the home, then sold it at a public auction at the beginning of May. With a sale price of $40,000, nearly $15,000 in taxes owed and over $6,300 in legal and court fees, it appears Tallage cleared almost $19,000 in profit on this property.Without action from the legislature, Massachusetts homeowners have been in a state of limbo. Then, last month, a Hampden County Superior Court judge ruled that the state law permitting this practice was also "unconstitutional."Both Tallage's owner and lawyer declined to comment on whether they were changing their business practices or what they planned to do with the profits from the auction in Ware. On Beacon Hill, State Senator Susan Moran, chair of the Joint Revenue Committee, says the legislature is finally moving forward."The court decision made it imperative," Moran told 5 Investigates' Karen Anderson. "It is the bill that prevents equity theft for homeowners."Moran's committee's bill would increase requirements for notifying homeowners that they are in danger of foreclosure. But if a foreclosure does take place, excess profits would be held for 18 months with interest for homeowners to claim. "Lots of times, consumers that were in financial trouble really had no idea of what was happening, what the next steps were. They would just get a notice that their home was gone," she said.However, some are concerned that the bill continues to include private companies in a process that they believe should only be between citizens and the government."It doesn't really make sense to me that the legislature would come up with a one-fits-all fix that puts the private companies in the same footing and in the same place as municipalities," said Peter Brown, an attorney who works with municipalities on tax-related issues. "They never have been. They're not; they don't belong there."Brown said the combination of increased bureaucracy in the tax title process and the inclusion of private companies in the process could continue to perpetuate problems for homeowners."I think it would be tragic," he said.But Brown says if a city, town, or private company keeps the profits from such a sale, it could find itself in future legal trouble."They're going to probably find themselves in a lawsuit, and they'd be violating the United States Constitution," he said. "They'd be violating a clear policy."
WARE, Mass. —
A recent home auction out in the Western Massachusetts town of Ware seemed like business as usual.
However, the seller was neither a bank nor the town, but rather Tallage Brooks, LLC, a company that buys tax titles from municipalities of properties that have fallen behind on their taxes.
Advertisem*nt
The practice is commonly referred to as equity theft, and despite the Supreme Court ruling it unconstitutional a year ago, the law in Massachusetts hasn't changed.
But this week, Beacon Hill lawmakers are finally making progress towards changing policies when it comes to homeowners who have fallen behind on their taxes. Some are wondering, however, if the new bill goes far enough to protect residents from potentially losing everything.
The former owners of the Ware home owed just under $15,000 in unpaid taxes. Tallage bought the lien from Ware, and in 2023, they foreclosed on the home, then sold it at a public auction at the beginning of May.
With a sale price of $40,000, nearly $15,000 in taxes owed and over $6,300 in legal and court fees, it appears Tallage cleared almost $19,000 in profit on this property.
Without action from the legislature, Massachusetts homeowners have been in a state of limbo. Then, last month, a Hampden County Superior Court judge ruled that the state law permitting this practice was also "unconstitutional."
Both Tallage's owner and lawyer declined to comment on whether they were changing their business practices or what they planned to do with the profits from the auction in Ware.
On Beacon Hill, State Senator Susan Moran, chair of the Joint Revenue Committee, says the legislature is finally moving forward.
"The court decision made it imperative," Moran told 5 Investigates' Karen Anderson. "It is the bill that prevents equity theft for homeowners."
Moran's committee's bill would increase requirements for notifying homeowners that they are in danger of foreclosure. But if a foreclosure does take place, excess profits would be held for 18 months with interest for homeowners to claim.
"Lots of times, consumers that were in financial trouble really had no idea of what was happening, what the next steps were. They would just get a notice that their home was gone," she said.
However, some are concerned that the bill continues to include private companies in a process that they believe should only be between citizens and the government.
"It doesn't really make sense to me that the legislature would come up with a one-fits-all fix that puts the private companies in the same footing and in the same place as municipalities," said Peter Brown, an attorney who works with municipalities on tax-related issues. "They never have been. They're not; they don't belong there."
Brown said the combination of increased bureaucracy in the tax title process and the inclusion of private companies in the process could continue to perpetuate problems for homeowners.
"I think it would be tragic," he said.
But Brown says if a city, town, or private company keeps the profits from such a sale, it could find itself in future legal trouble.
"They're going to probably find themselves in a lawsuit, and they'd be violating the United States Constitution," he said. "They'd be violating a clear policy."
Months after Supreme Court ruling, 'equity theft' law still on the books in Massachusetts
