In February of 1950, Philip and Marion Woodbridge of New Jersey bought a colonial house in Greenfield built in 1915, with 3,000 square feet of finished space, and a total of 19 acres of land at the northern end of Stone Ridge Lane.
The house remained in the family until October of 2021, when the City of Greenfield took the title and auctioned the property to recoup unpaid taxes. “I’m delighted we recovered our taxes, which was my sole goal,” one city official told The Recorder. “I didn’t ever expect to have it go considerably above.” According to the city, the taxes due came to roughly $60,000. The house sold for $270,000. The city kept 13 acres of the property, assessed at $49,900, for public woods trails. Altogether, the city made approximately $260,000 in equity from this one “title taking” process.
Last April, I wrote about another Greenfield couple that nearly lost their Victorian house for back taxes, but managed to “redeem” and save almost an equal amount in equity as the Stone Ridge Lane property. Mitch Speight, and Joan Marie Jackson, the owners who snatched their home from the jaws of title taking, are now assisting me to get Greenfield to stop what’s known as “home equity theft.”
We recently met with the mayor to present a list of recommendations for ending the practice of forcing property owners to pay many times more than what’s needed to make the city whole — including all back taxes, interest, and collection costs.
We suggested:
• The treasurer’s office should adopt a policy that Greenfield shall be fully compensated for all delinquent property taxes — plus all collection costs, interest, and legal fees — but the city will not seek any payment from a delinquent taxpayer in excess of what they owe. Any home equity — beyond that which is required to make the city whole — shall not be collected, on a “wholly voluntary” basis, as part of the delinquent tax process.
• The city should post on the tax collector’s website page, in lay language, a full explanation of what “title taking” is, how the process works, what’s at risk for the property owner, and how to redeem a home.
• Instead of using title-taking law in Land Court, the city should pursue delinquent taxes in district court, where debts are paid but with no surplus home equity.
• When property tax bills are mailed, a letter should be attached explaining that if a title-taking goes to foreclosure, any equity the taxpayer had is taken by the city. The taxpayer receives no surplus equity in the property above what is needed to make the city whole. Even if the value of the property is many times more than the redemption amount, the taxpayer will lose all equity value when a judgment of foreclosure issues.
• The city should enact an ordinance that allows the taxpayer to pay back taxes in installments before a case for foreclose is filed. It would allow for standard repayment agreements between the treasurer and taxpayer. By state law, such repayment agreements must be for a term of five years or less, and may not forgive more than 50% of the built-up interest on the tax title account. The agreement also must require a minimum upfront payment of 25% of the amount needed to redeem the property. This would create a uniform repayment plan for all taxpayers.
• Greenfield’s tax collector should publish an annual report detailing each tax title case in the city, by date, street address, with all proceeds from tax title sales, and the net surplus equity revenue collected, by sale, in excess of tax debt and collection costs.
• The mayor and City Council should lobby our delegation to the General Court to pass H. 3053, which after the forced sale of a property, returns to the property owner — or the heirs — any surplus equity, just like a bank mortgage foreclosure.
The company that Greenfield hires to conduct foreclosure auctions, is also used by Montague, New Salem and Orange. It conducts 2,000 auctions annually in New England. On one day in October of 2020, the company auctioned off seven homes or parcels of land in Greenfield. On their website, the auctioneer posts this testimonial from Greenfield’s tax collector: “We are so pleased with the outcome of the auction, [the company] made the process so easy and our profits are greater than expected.”
The excess profit-taking should stop. Every municipality in the state has legal options to collect every penny owed to it and nothing more.
Al Norman’s Pushback column appears every third Wednesday of the month. Comments are welcomed at: info@sprawl-busters.com.