THE REAL ESTATE TAX CRISIS and MORE FORECLOSURES
 |
 |
Homeowners
Picket Texas Law Firm Linebarger, Goggan to demand fair payment plans
for real estate taxes. |
|
Philadelphia homeowners are being forced into impossible payment plans and having their homes sold at Sheriff Sale due to a new Texas based law firm aggressively collecting back taxes.. Many of these taxes are being collected as a result of a bond issue from the Rendell years which relied on collection of pre-1997 delinquent real estate taxes to pay the bonds. Other taxes are post 1997. PUP is asking for reasonable payment plans for lower income homeowners, a freeze on penalties and interest and a temporary tax amnesty for people who set up repayment plans in the next year.
In November of 2004, tens of thousands of “demand letters” were sent to Philadelphia homeowners threatening them with legal action to collect overdue real estate taxes by the law firm of Limebarger and Coggins, who were hired to collect the back taxes. Many of these families are now faced with the possibility of a tax lien “foreclosure” and the loss of their homes. Community Legal Services and Housing Counseling Agencies in the city have been working with homeowners faced with these back tax demands. They have been observing the following:
Most taxpayers are never told that low-income financial hardship agreements are even available.
Instead, low-income homeowners who cannot make large monthly payments are told to file bankruptcy or get home equity loans.
Penalties, interest, fees and charges often make of almost half of the tax bill. These charges all continue to build up even if homeowners made an agreement, locking them into paying delinquent taxes for life.
It can take months to arrange a financial hardship agreement and there are no written rules about affordable agreements (who qualifies for one, what is the maximum you're required to pay each month and how long can agreement last?) so that the terms of any agreement change depending on who you talk to.
There is no simple way for people to dispute their bills, correct errors by the City, or compromise on the amount owed.
Many taxpayers’ homes ARE being sold at sheriff sales.
We are asking the Linebarger and Goggan and the City of Philadelphia to ACT on the following 7 ideas and help Philadelphia Homeowners:
- Encourage Financial Hardship Agreements
Low-income homeowners, many seniors on fixed incomes, cannot afford to make monthly payments that often require more than half of their income. Low-income homeowners should be able to arrange “financial hardship” agreements, requiring them to pay no more than 5%of their household income or $25.00 (whichever is higher) toward delinquent taxes
- Freeze Penalties, Interest & Fees While Homeowners Make Payments Even if low-income homeowners make a hardship payment plan, the City adds additions, penalties, interest& attorney's fees to the principal amount already owed. For a senior citizen living on $606 a month, if he or she owes $5,000.00 in back taxes and agrees to pay $30 a month, the entire payment will pay interest, penalties and other fees. As a result, the homeowner will be locked into debt and can end up paying the City for life
- Create a One Year Amnesty-Incentive Program Rewarding Homeowners Who Make Agreements Now
- Ensure that Financial Hardship Agreements are offered FIRST - NO BANKRUPTCIES OR HOME EQUITY LOANS SHOULD BE ENCOURAGED TO PAY OFF THE TAXES
As an incentive for homeowners to make payment agreements now, the City should create a one-year “Amnesty-Incentive” program, providing taxpayers with a real path out of debt. For twelve months, as part of a ‘financial hardship’ agreement, the Department of Revenue and the firm of Linebarger, Goggan, Blair & Sampson should agree to forgive all remaining debt (principal, interest, penalties, fees) once homeowners have successfully paid 50% of the principal originally owed.
- Create a Home Ownership Protection Grant Program for the Most Vulnerable Homeowners
- Adopt Regulations Laying Out the Terms for Financial Hardship Agreements, Amnesty & Grants
- Create Notices of Overdue Taxes in Plain English & Spanish