Philadelphia Unemployment Project

Archive for September, 2006

PUP wins a chance for people to pay back taxes and keep homes

Thursday, September 28th, 2006

PUP has had another victory in our ongoing struggle to protect the homes of unemployed and low income people Board Member Pete Specos protests outside Linebarger,Goggan, Blair & Sampson offices - the Texas bill collectors

Board Member Pete Specos protests outside Linebarger,Goggan, Blair & Sampson offices - the Texas bill collectors

. Over the past 2 years we have been fighting the hard ball collections tactics of Texas law firm Linebarger, Goggan, Blair and Samson, that has been brought into Philadelphia to collect back real estate taxes.

On September 26 Linebarger confirmed that homeowners being pursued for Wachovia tax liens for pre-1997 taxes will be covered by the Financial Hardship Agreements that PUP negotiated with the City of Philadelphia for delinquent real estate taxes (Philadelphia Inquirer coverage of the victory).The financial hardship agreements allow low income homeowners to pay a percentage of their incomes each month (5, 8 or 10%) to prevent sheriff’s sale as long as they keep up with payments. It’s a tiered system, the highest tier is 10% of your income for homeowners at 185% of Federal Poverty Income Guidelines. When you remember that many low-income homeowners here own their houses outright (because of inheritance or very low cost ownership transfers), this means a person can keep a roof over their heads for somewhere between $25 and $300 a month, in most cases.

The City sold all of its back real estate taxes through a bond issue in 1997 with Wachovia Bank as trustee. After the bonds defaulted bond insuring agency MBIA paid them off and hired LGB&S to collect the debts. Linebarger also was hired to collect city taxes soon after. PUP objected to their aggressive collection practices and readiness to foreclose on people’s homes and began organizing homeowners to fight for reasonable payment plans. Demonstrations focused on the law firm and Wachovia Bank. We approached the city for hardship repayment guidelines and won a repayment plan for all post 1997 taxes last summer. The city also agreed to a temporary forgiveness program to forgive penalty and interest on back taxes which ran from December 2005 to last May.

However, MBIA refused to agree to a similar plan for the pre-1997 taxes. Linebarger has been scheduling 200 sales each month on homeowners with MBIA/Wachovia tax liens.
PUP and other organizations have been pressing MBIA, which now owns the liens, to offer the reasonable payment agreements. A rally at the December 2005 real estate tax sheriff’s sale generated a top of the page story on the Inquirer Business page detailing MBIA’s role in tax sales.Finally after directly contacting a top MBIA official about a Philadelphia family facing a sale on September 19 things moved. The families’ sale was canceled and they were
given a $25 per month agreement, despite Linebarger’s ongoing refusal to offer such a deal. Now we have a letter confirming the final agreement for Hardship Guidelines for all pre-1997 tax liens to use the 5%, 8% and 10% monthly payment plans authorized by the city last year.

Many distressed households should be able to save their homes as a result of these new guidelines.

read Inquirer article

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