Thinking Citizen Blog — “Home Equity Theft” — How Municipalities “Steal” from the Vulnerable — Boston Globe
Thinking Citizen Blog — Saturday is Justice, Freedom, Law, and Values Day
Today’s Topic: “Home Equity Theft” — How Municipalities “Steal” from the Vulnerable — Boston Globe
Should municipalities be allowed “to reap huge profits from sales of foreclosed homes”?
The US Supreme Court, in a unanimous decision in 2023 (Tyler versus Hennepin County) ruled no. But the practice has continued anyway. This week an editorial in the Boston Globe called for state level legislation to put an end to this travesty once and for all. Today, some excerpts from that article as well as a few details on the Supreme Court case.
Experts — please chime in. Correct, elaborate, elucidate.
“STEALING HOMES RIGHT FROM UNDER VULNERABLE OWNERS IS JUST WRONG” (Boston Globe) (below, map of states that allow home equity theft)
1. “It defies belief that a year after a landmark US Supreme Court decision virtually outlawed the practice, Massachusetts cities and towns have continued to pursue actions that in too many cases take from homeowners not just but what they owe but all they own.”
2. Chief Justice Roberts in Tyler versus Hennipin: “A taxpayer who loses her $40,000 house to the State to fulfill a $15,000 debt has made a far greater contribution to the public fisc than she owed. The taxpayer must render unto Caesar what is Caesar’s, but no more.”
3. “Municipalities have defended taking surpluses on the grounds that it costs them money to take over and then dispose of tax-delinquent property.”
NB: “But the Supreme Court’s ruling clearly ruled out that practice. And in Massachusetts many cities and towns off-load the debt collection joy and its lucrative proceeds to private collectors.”
THE US SUPREME COURT CASE — Tyler versus Hennipin Count (2023) — below Geraldine Tyler
1. “94-year-old Geraldine Tyler…fell behind on her property taxes, owing $2,700 and another $12,300 in fees.”
2. “Hennepin county took her property and sold it for $40,000. But instead of returning Ms. Tyler her remaining $25,000, the County took the money for its own use.”
3. “Typically, if a property owner is behind on her property taxes, governments will take the property, liquidate it, and use the funds to pay off the tax bill and accrued fees. Most states then return the remainder back to the property owner.”
NB: “However Minnesota and 13 other states maintained a practice of greedily pocketing any surplus equity instead of returning it to the rightful property owner.”
THE CRUX OF THE CASE — WAS THE $25,000 IN EQUITY REALLY GERALDINE TYLER’S? (Below, the “Takings Clause” of the Fifth Amendment of the US Constitution — how many of the other provisions of that amendment can you remember? which one does not apply to the states? See last link below to re-fresh your memory.)
1. “Hennepin County had argued that an early 20th century Minnesota statute removed any property right Ms. Tyler might have had.”
2. “That statute declared that after a tax foreclosure, any remaining equity became the property of the local government. The county argued that under this stature, Ms. Tyler no longer owned the remaining equity, so the county could take it without triggering the just compensation requirement (of the Fifth Amendment of the US Constitution).”
3. “The Supreme Court brushed this argument away, explaining that although “state law is one important source for the definition of property, it “cannot be the only source.” Otherwise states could take any property they wanted without paying for it, simply by defining it away. If successful, such a tactic would make the Fifth Amendment meaningless.”
Stealing homes right out from under vulnerable owners is just wrong — The Boston Globe
‘Home equity theft’ in Massachusetts is the focus of federal lawsuit — The Boston Globe
Seizing home equity over unpaid taxes is unfair to homeowners — The Boston Globe
Supreme Court ruling could spell the death of ‘equity theft’ in Mass. — The Boston Globe
The state tax foreclosure law is unconstitutional. So why is it being enforced? — The Boston Globe
Efforts to ban ‘home equity theft’ in Massachusetts picking up steam — The Boston Globe
Home Equity Theft Prevention Act — Wikipedia
The Supreme Court Strikes Down Home Equity Theft
Fifth Amendment to the United States Constitution — Wikipedia
QUOTE OF THE MONTH
“Make your own Bible. Select and collect all the words and sentences that in all your readings have been to you like the blast of a trumpet.”
- Ralph Waldo Emerson
My spin — then periodically review, re-rank, and exchange your list with those you love. I call this the “Orion Exchange” because seven is about as many as any human can digest at a time. Game?
For the last four years of posts organized by theme:
PDF with headlines — Google Drive
Four special attachments below:
#1 A graphic guide to justice (9 metaphors on one page).
#2 “39 Songs, Prayers, and Poems: the Keys to the Hearts of Seven Billion People” — Adams House Senior Common Room Presentation, (11/17/20)
#4 Palestine Orion (Decision) — let’s exchange Orions, let’s find Rumi’s field
(“Beyond all ideas of right and wrong, there is a field. Meet me there” Rumi, 13 century Persian Sufi mystic)
YOUR TURN
Please share the coolest thing you learned in the last week related to justice, freedom, the law or basic values.
Or the coolest, most important thing you learned in your life related to justice, freedom, the law, or basic values.
Or just some random justice-related fact that blew you away. This is your chance to make some one’s day. Or to cement in your mind something that you might otherwise forget. Or to think more deeply about something dear to your heart.
