Banks and Hedge Funds Move into the Property Tax Collection Business
Wednesday, October 20, 2010
Bank of America, JPMorgan Chase and other Wall Street powerhouses have moved into the tax-collecting business, setting up new entities that press struggling Americans for late property tax payments.
The Huffington Post Investigative Fund uncovered nearly a dozen major banks and hedge funds that are using subsidiaries to contract with local governments owed the unpaid taxes on hundreds of thousands of properties. The practice is called “tax lien investing. The businesses “tack on escalating fees and threaten to foreclose on the homes of those who fail to pay,” according to the story.
In some cases, homeowners owing a few hundred dollars in property taxes find their bills climbing into the thousands because of the extra fees and interest rates, some of which are as high as 18%.
Earlier this year, 51 of Florida’s 67 counties sold more than $1.6 billion of real estate tax debt, primarily to banks and hedge funds.
Among those victimized in the scheme are a Salvation Army shelter, a Florida preschool and Los Angeles Lakers star Lamar Odom.
-Noel Brinkerhoff, David Wallechinsky
The New Tax Man: Big Banks and Hedge Funds (by Fred Schulte and Ben Protess, Huffington Post Investigative Fund)
Basketball Pro Entangled in Debt Collection Net (by Ben Protess and Fred Schulte)
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