Pushback: Greenfield’s ‘home equity theft’ finally repaid

Al Norman

Al Norman

By AL NORMAN

Published: 04-29-2025 11:26 AM

At 9:50 pm on April 16, “home equity theft” was finally repaid in Greenfield. The City Council voted to pay a $354,000 settlement, including legal fees, to two former homeowners who lost their property at tax-title auctions, forfeiting equity in excess of taxes owed. Eight years after these homes were “taken,” some of their lost equity was returned.

Here’s the backstory:

My neighbors, Joan Marie Jackson and Mitch Speight, approached me in December of 2021 because they were facing eviction from their home for back taxes. If their home had been auctioned at its assessed value, the couple would have lost $219,000 in equity above taxes owed. Instead, they raised the funds to pay off their debt.

On May 25, 2023, the U.S. Supreme Court ruled unanimously that the practice of governments taking more than they are owed when collecting delinquent property tax violated the Constitution. The SCOTUS ruled that municipalities “could not use the toehold of the tax debt to confiscate more property than it was due. The taxpayer must render unto Caesar what is Caesar’s, but no more.”

Joan, Mitch and I urged the City Council and mayor to support legislation in the General Court to repeal equity theft. We testified before the Legislature to change state law. We began looking for homeowners in Greenfield who had lost equity at tax title auctions. On July 11, 2023, we wrote a letter in the Recorder asking: “If any reader knows of the current whereabouts of the following individuals, we are looking to discuss with them property that was ‘taken’ by the city of Greenfield.” We searched for five owners who were on the city tax collector’s list. It took us about two months to track down two homeowners, both of whom were willing to become plaintiffs in a legal complaint.

The homeowners filed their lawsuit in September of 2023 in U.S. District Court, Mass. Western Division. Attorneys Tom Lesser and Michael Aleo of Northampton charged that Greenfield had violated the Takings Clause of the Fifth Amendment, and the Excessive Fines Clause of the Eighth Amendment of the Constitution “by seizing the plaintiffs’ homes to recover the monies they owed to the Town … but refusing to pay them the balance between that amount and the value of the property seized.” One of the plaintiffs owed only $5,762 in unpaid taxes on his home and 19.4 acres, including interest and legal costs. Thirteen acres were wooded trails already used by the public. His home sold at auction for $270,000, and he got nothing from the sale. The city also kept the 13 acres of trails.

Fourteen months after the SCOTUS ruling, the Massachusetts General Court sent legislation to Gov. Maura Healey’s desk, ending home equity theft. Healey signed the bill on July 29, 2024. Senator Jo Comerford, a major supporter of the legislation, credited Speight and Jackson as key actors in the bill’s success. “It’s a classic, best moment of democracy,” Comerford told the Recorder, “where people have the power to change the course of a legislative session because of their own courage and action.”

In October of 2023, Greenfield filed a motion to dismiss the home equity lawsuit. Eight months later federal Judge Timothy Hillman denied the city’s motion, and wrote that the city’s choice “to line its coffers to this extent serves as a stark example why this statutory scheme is subject to constitutional challenge in multiple cases throughout the Commonwealth.” In August of 2024, one year after the federal lawsuit was filed, the parties agreed to enter into “Alternative Dispute Resolution” to settle the case. Seven months later, the parties reached an agreement. On April 16, 2025, the City Council adopted a motion to pay $354,000 from free cash to settle the case. This agreement never would have happened without the support of Greenfield Mayor Ginny Desorgher.

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There remains one more home equity step for Greenfield: the city should adopt the new section 62A of Chapter 60 of state law, which allows municipalities to offer homeowners repayment agreements up to 10 years to “redeem” their home, with a 10% initial down payment on the debt. The city can waive the accrued interest and lower the interest rate. A house in tax-lien status used to be charged 16% interest on debt, but that can now be lowered to “such lower limit as the bylaw may specify.”

Every municipality should set a “zero auction” goal, through counseling on repayment agreements, existing assessor’s property tax exemptions, circuit breaker state rebates, and reduced interest rates.

Al Norman’s Pushback column appears in the Recorder every first and third Wednesday of the month.