Well, I'm off to my county's annual tax sale. I was shocked to learn that we have over 1000 parcels of real estate in the sale this year. Apparently this is a little high but not dramatically so. Some of the offerings are for tax certificates on odd little pieces like a one foot wide strip between city lots but others are beautiful homes and nice land parcels. I'm going to bid on a 27 acre parcel which is adjacent to 11 acres I currently own. The bid minimum is just over $4200 though, like any auction, there's no upper limit. With a tax sale here all you're buying is a tax certificate which becomes a lien on the property. Anyone can come and redeem it for the owner withing a year by paying the tax plus 10-15% premium (depending on whether it's before or after 6 months from the sale date) plus 10% APR on the total amount bid. If no one redeems the tax certificate within a year the sheriff issues a tax deed which transfers ownership subject to no encumbrances except municipal and federal tax leins (of course). If a mortgage holder is asleep at the switch, they simply loose their collateral. Of course, they receive statutory notifications but stranger things have happened.

In this case, I'm in a rather unique position in that I'm going to bid because I AM the mortgage holder and the property is in foreclosure but that foreclosure is being litigated. I could simply pay the taxes (or rather could have through yesterday) but decided to go this way instead. I'm hoping to be able to be the successful bidder and force the other side to either pay these before the suit is adjudicated. If I can delay the trial for a year and they don't pay up, ownership of the property transfers and the foreclosure part of the suit becomes moot.

Needless to say, it ought to be interesting to see who's there bidding against me, if anyone, and how much they're prepared to bid. Wish me luck. ;o)

-- Gary in Indiana (gk6854@aol.com), September 13, 2001

Answers

Response to Going to a tax sale

Gary, You prey on other's misfortune and you want us to wish you luck? Give me a break! You're swine!

-- Anybody (abc@123.com), September 13, 2001.

Response to Going to a tax sale

Blow it off Gary! Just because somebody does not pay their taxes, doesn't mean you should let big corperations take over. Isn't it funny how people want to blame someone else for what they don't do? It's always the banks fault, or the credit card's fault. You never hear anyone say, It was my fault, I didn't pay what I said I would.

-- Somebody (Somebody@hotmail.com), September 13, 2001.

Response to Going to a tax sale

Sounds like you've been put to a lot of trouble, Gary. Hope you get the property!

-- Jennifer L. (Northern NYS) (jlance@nospammail.com), September 13, 2001.

Response to Going to a tax sale

Gary, ABC's reply sounds like sour grapes. If he new anything about the process and other 'Big Businesses' that would end up with the tax lien, he would be praising you.

-- ken (steelframeme@yahoo.com), September 13, 2001.

Response to Going to a tax sale

Hi Gary, Stupid question alert :)

Since you are the mortgage holder, aren't you also the owner? What was so unusual about the litigation that your chose to do the tax sale? I thought foreclosures were a pretty cut-and-dried situation.

Thanks,

-- GT (nospam@nospam.com), September 13, 2001.

Well, let me address ABC here. The first thing I have to say is you are a gutless wonder. To impune someone's integrity without the courage to sign your name is cowardly. As to taking advantage of the "misfortune" of another, let me say this. I am putting money back into the tax rolls so that police and fire personnel like those who bravely gave their lives in the service of others this week can have the best equipment and training available. I am putting money in that goes to schools and libraries and roadways. I'm putting money in that goes to care for the elderly and indigent. For doing this I'm evil? I think not! You need to step back and look at the big picture here. I'm doing what they should have done and didn't. They are the ones failing to live up to their legal, ethical and moral obligations as members of the community, not me.

Now, ABC, if you have even a fraction of the integrity you claim I'm lacking, you'll respond and have the courage to use a legitimate name and email. I doubt you will, as people of your ilk seldom do. Show some guts and prove me wrong.

-- Gary in Indiana (gk6854@aol.com), September 13, 2001.

Three things here (after blowing off steam at an idiotic response to my post here).

First, I bought the tax sale certificate for $40,000 today. The owner now has one year to pay the taxes, statutory penalties, fees and interest before a sheriff's tax deed is issued. It's a long time. Meanwhile, I have no more rights to the property than I did yesterday. It's merely a leinhold interest.

Jennifer, thanks... I needed a hug. ;o)

GT, here's the deal. As a mortgage holder I am not an owner. Indiana is a lein state. Property remains deeded to the owner of record while the mortgage holder has a leinhold interest. In other states a 'deed of trust' is used wherein title actually transfers to the lender. That is likely what you were thinking. I should have explained that in my post. Having grown up with this it's easy to assume everyone has.

As to foreclosures being 'cut and dried' it's been my experience that nothing in life is. The other party has made it abundantly clear they intend to outright lie in order to stop my foreclosure. They are challenging (through their pro bono legal counsel) not only the validity of the mortgage but of the underlying obligation as well.

Tomorrow I'm going to go pay the 1/2 year tax installment due in November (the amount simply gets added to the lein/redemption balance and accrues 10% interest to me until the property is redeemed, if it is).

Note to ABC: I'm putting yet more money into the tax rolls with this. In January, if the property has not been redeemed, I intend to pay the entire year's taxes so I will have then paid three year's taxes on this property without owning it. I'm just here to help. ;o)

-- Gary in Indiana (gk6854@aol.com), September 13, 2001.

Thanks for clearing that up, Gary. I've never been in a foreclosure situation (and if I were, I'd sell or deed it back in lieu of foreclosure before messing up my credit), and wasn't sure if it was an owner-carried mortgage. From your answer, I gather that even an owner- financed property forclosure would be tough!

On the west coast, at least as I understand it, the mortgage company owns your property. You don't pay, you lose the property.

Good luck getting the property, and it is really a shame you have to go to so much trouble to do it. ABC is way out of line, and that's typical of people who think everyone owes them a free lunch.

-- GT (nospam@nospam.com), September 13, 2001.

Gary, Here in Florida if a landowner does not pay their Property Taxes they Auction off Tax Certificates. The Person who bids the lowest intrest rate gets the Certificate and is responsible for the Taxes for that year. If the Landowner pays you get the money back for the Taxes paid plus the intrest at the rate you bid at. If the taxes remain unpaid for 3 years you are given a Tax Deed and the property is yours INCLUDING ALL outstanding Liens. If the property is free of Liens you have gotten the property for the sum of the Taxes you paid for 3 years. The more desirerble properties Tax Certificates are usally bid as low as 0% especialy ones free of Liens, but usally the taxes end up being paid on these desierble pieces. I have known folks that have ended up with some good property for a song. I also had a friend bid on a Tax Certificate on an empty lot in a subdevision when he paid the taxes he went and looked at the property he found out it was a retention pond. I myself have never attended one of these sales so I may be a little confused to all the particulars of the happenings.

-- Mark in N.C. Fla. (deadgoatman@webtv.net), September 13, 2001.

Mark,

Here in Indiana it's also tax certificates being sold but the fees and interest rates are established by statute. Rather than bidding interest rates, we bid dollars. That way the taxes are paid and the taxing unit gets the money in their coffers immediately.

Another big difference I see is in the way the deed is delivered at the end of the redemption period. Here it's given free of any pre- existing encumbrances (mortgages, other private liens, etc.) except for taxes and other municipal charges (new sidewalks, boarding up a vacant/damaged property, etc.) so when you get the sheriff's deed you go record it and you're set. It sounds like in your situation someone could give their brother-in-law a mortgage and you'd have to pay that off to get clear title. Here there's no incentive to do that as whatever bogus lein appeared would be wiped out by the sheriff's deed anyhow. I think if you're going to do this for profit research would be the key. Two of the three biggest buyers today were from out of state representing mortgage/investment concerns. I spoke with the third, a local man who must've bought 100-150 certificatesm humself. He told me he didn't want any of the properties. He was only buying in order to have the guaranteed 10% premium on the taxes plus the 10% APR return on that and any overbid amount. He told me he tried to buy only on properties with large mortgages as he felt confident the mortgage company would redeem the property. I can see how this could be profitable. I can also see how you could get burned badly. I was there for one property that I knew and got the certificate on it so I left happy. Poor, but happy. ;o) Thanks for your response. It's interesting to learn how it's done in other areas. I'd always heard bits and pieces about tax sales but had never researched them or attended. I'd recommend going to one in your area if you have the time. I found ours quite interesting, but, maybe I need a hobby. ;o)

-- Gary in Indiana (gk6854@aol.com), September 13, 2001.

Good Morning Gary,

First, I'd like to apologize for the swine comment. I'm sure you're a decent person or you wouldn't hang around the Countryside forum.

Second, I'd prefer to remain anonymous as I'm a longstanding and respected member of this forum. I'm not gutless, just intelligent enough to know that my view on this situation may be unpopular with some and I'd like to retain my respected tenure on this forum. You however are the one who pranced out in public to let the world know you were going to a tax sale. You went public, I'll stay anonymous. I just thought I'd call you on it. Besides, names really mean nothing. What's said is what's important.

Now, on to the matter at hand.

What an interesting set of replies. But all they do is explain the mechanics of the tax sale. None address Gary in Indiana's motivation for participating in a tax sale. You can sugar coat it to yourself all you want. You can tell yourself you're doing it for the police and fireman until you're blue in the face. Maybe you've actually convinced yourself of that, but the dirty truth is your motivation is profit. It's a win-win situation for you at the expense of someone else. If they can't, or won't, pay you get the property and they lose everything and you gain everything (land, house, barn, chicken coop, machine shed, well, everything), except Cesear's due. If they can eventually pay, you make a sweet 10% profit. Now there's nothing wrong with an honest profit, that's why I invest. My God, I'm as conservative as the next person. No one should get a free ride and I can't stomach people who think the world owes them anything. What I am saying is that a tax delinquency situation is between the deliquent property owner and the taxing authority. I realize that you didn't create this situation or the tax sale itself. But, if you're going to inject yourself in the middle of it, at least be honest with yourself and others and admit that you're real motivation is to pick up an immoral bargain. Spare us the self-righteous dribble.

In this world, there are many ways to make a profit--some honest and some sleazy. Likewise, there are many reasons why someone may be delinquent on their taxes--some unfortunate and some sleazy. I just think that your choice to make a buck is less than honorable.

-- Anybody (abc@123.com), September 14, 2001.

Let's be realistic, Gary is in a situation where people are taking advantage of him. They owe him money and don't want to pay. They are even going to the point of getting a lawyer and trying to invalidate a mortgage they knowingly and willfully entered into. Gary is hoping to get the property back without having to do the litigation and cost thereof.

As far as the tax sale, first off this is the means by which the county put's this property back into the public's hands. If someone doesn't redeem it then the county ends up owning it(at least in my state). The land lays dormant and no one uses it until they purchase it from the county. What good does this do? I assure you there is plenty of notification and time to allow someone to get this land back "IF" they wanted it and were unable to pay up at this time. In my state, you purchase certificates, then 2 years later you can get a deed for it, then the owners have a 3 year redemption period "after" you have the tax deed. Either way, if someone redeems it or not the original owners are out close to the exact same money to get it back. If no one purchases the certificate, they still have to pay the county interest. Sorry ABC but it just sounds like you're bitter about having lost some land this way. Get real, what's supposed to happen? The state is supposed to sit around waiting for a person to get serious about wanting thier land back and just give it back to them? I don't think so, they will always get thier money one way or another.

-- Repsonder T. ABC (DDwhiner@yahoo.com), September 14, 2001.

Anybody, I don't understand your response at all. If this were some other state, he could have foreclosed on the property long ago, because in other states the mortgage holder IS the owner. Why do you feel it is wrong for Gary to get back (after a considerable amount of trouble I might add) what is rightfully his?

If those properties are not sold/auctioned off to someone (person, business) that is lost tax revenue to the community.

Do you honestly think that it is okay not to pay your bills? I don't. If I couldn't pay, I'd make other arrangements. If you don't want to do the right thing, distasteful though it might be, well, TS (terribly sorry). Gary is not a bad person for doing this.

Bad things happen to everyone at one time or another. Get over it. Losing your house in a foreclosure is not the end of the world, and you wouldn't even have that black mark against your credit if you'd cut your losses and gotten rid of it when you could, living a simpler lifestyle until you could afford a house (with all its taxes) again.

There is no "bad guy" here. You want bad guys, go after all the people getting round the bidding rules on HUD repos by forming illegal partnerships where someone lies and says they're buying to own and reside when in fact they are "fronts" for the real owners so that they can get in with lower bids than those actually buying for investment purposes.

-- GT (nospam@nospam.com), September 14, 2001.

As I am in a simular situation. Let me tell you about WVA law. We owner financed a person for a piece of land. In our contract he did not have to pay interest till we had the property surveyed and we paid the taxes till this was done. His payment was applied to the principal which lowered his interest due each year. This person now wants us to sign the property over to him without paying any interest, just the origanal cost per acre. Not what we agreed to. We told him we would give back the principal paid and end the contract.no wording in the contract required us to do this. His answer, No, so we foreclosed. His lawyer has twisted and turned a vary leneant contract around,[ because the wording can be interruped either way] and the courts want us to agree to let him have this property what ever way he now wants to set it up. Who is the loser here, we are. As of this date we have 4,000 dollars tied up in court and lawyer fees. If we allow this, we will be paying him to take the property. Forecloser easy, forget that. Even when you try to help, It can back fire. Gary, at least can try to reclaim his property. I for one, say Good luck, I hope it works out. That person did not forefill his obligations. Sence when did it become right to expect to aquire property without paying for it. Gary owned it first, He was the one who bought it or he would not have been able to sell it. How about his rights? When a person agrees to do something in order to purchase property, then he should not be able to change the contract just because he doesn't want to do it that way anymore. NO bank or mortage company is obligated to litigate with their clients. you don't pay, you lose the property. Remember also, if taxes are due, then he did not pay them either or there could not be a tax sale. Seems to me that this person did not take in consideration, any of his obligations. Just my thoughts!! Lexi

-- Lexi Green (whitestone11@hotmail.com), September 14, 2001.

This is to ABC.

I honestly don't know where to begin in addressing your last posting. I am amused you start by apologizing for calling me "swine" only to end by alluding that I am dishonest, immoral, self-righteous, sleazy and dishonorable. I'm not sure I wasn't better off just being swine. You're resorting to an all-too-common fallacious debating technique known as "ad hominem arguments." Essentially, when the actual argument is weak or meritless or the arguer is unskilled or inept, they resort to personal attacks on the other party to draw attention away from the actual issue. Unfortunately for you, I will not be dissuaded from staying on point by your sophomoric efforts. Sorry for your luck.

This does certainly explain why you choose anonymity. You claim to be "a longstanding and respected member of this forum." I can't help but wonder how many forum members would describe you as that given your penchant for hiding an unpopular view because you are unable to successfully defend it. I still maintain "cowardly" and "gutless" are more apt adjectives. Why not come out of the closet and see how the harsh light of day reflects on your self-described "respected tenure" here? You say names mean nothing. If that's true, why hide yours? Why do you feel the need to be one identity in the light yet hide under the online version of a white hood when attacking someone as you have attacked me?

You erroneously claimed I said I was doing this for the police and firemen. I never said that (feel free to scroll up and check, but please read carefully). What I did say was that was where some of the money went. A dramatic difference, to be sure.

You claim "the dirty truth" is that my "motivation is profit." While I'm not ever ashamed of having profit as a motivation (I happen to love capitalism and hold it dear), again, you are wrong. My motivation in this instance was to protect my interests (and I'll even allow that part of those interests is a profit on my investment).

Here's the reality of it. I'm owed something in excess of $80,000 secured by a mortgage on real estate. The borrower is in default. I have no alternative but to foreclose and am doing so. Along with not paying me, the owner also failed to pay the property taxes and the property went to tax sale. To protect my mortgage position I bid $40,000 to obtain the tax certificate. That's 40,000 real, hard- earned, saved dollars of my money I had to deliver in cash or cashier's check the same day.

While I'm not expecting any sympathy here (nor am I asking for any), I'd like to point out that's something I should not have been forced to do. As it stands now, I've not gotten payment on my mortgage in months and I'm out of pocket an additional $40,000 right now and still have no rights to set foot on the property in question. How you can describe my position as "win-win" is lost on me.

In the best possible outcome I am able to expect, I would end up with sheriff's deed and be able to recoup less than $36,000 against my mortgage and have even more legal fees, time, effort and anxiety invested in this than I ever hoped or wanted. Only then do I get to do even more.

I get to buy a huge liability insurance policy on this place to further protect my interests. I get to pay any and all taxes and assessments incurred since the tax sale. I get to step in to ownership of property with a condemmed house, a garage with a rotted roof and no door, an old barn I'm afraid to even walk near (much less inside) and a couple of other little structures which scare me even more. When title actually transfers, I'll start getting notices from every imaginable agency to clean up, tear down and do whatever else is necessary to meet current standards. If I fail to meet deadlines on these tasks, I can be fined and even incarcerated.

In other words, I'll spend many more thousands of dollars and have effectively acquired a part time job managing all of this as well. There will be one difference, though. With any other part time job I could reasonbly expect a paycheck for my efforts.

When I'm done with all of this, then and only then am I able to sell the property and hope to net enough to pay all of my expenses to that point. If I happen to net more than that amount after going through all of this, then and only then might you call that a "profit" for me. Quite frankly, I'd much rather simply have collected monthly payments as we originally agreed.

If you see it differently, I'll be more than happy to have you step in right now and pay my out-of-pocket expenses to date (yes, I'll gladly throw in my time for free), pay off my mortgage and take my position in all of this. You can be owed the $80,000+, you can spend $40,000 cash to protect your interest in that mortgage and you can wait a year to see what might happen.

If you have any doubt that I'm serious, just email me and see. I'll be easy to contact as I'm the one with the courage and guts to stand up and be seen professing my opinions even though, like you, "my view in this situation may be unpopular with some."

-- Gary in Indiana (gk6854@aol.com), September 15, 2001.

Anybody aka ABC is the swine. To claim to be a "respected member of this forum" but to attack Gary and remain anonymous to protect what he/she believes is his/her reputation proves how gutless he/she is. Gary, power to you and to what little rights the state has given to you. You only become a "victim" if you sit around and feel sorry for yourself. I believe that your mortgage skipper and Mr/Mrs "Nobody" have already fallen prey to that and feel that the rest of the world owes them something. Gary you are an inspiration!

-- Marvin in Nebraska (brinmg@hotmail.com), September 19, 2001.

gary in indiana im jason in indian i did e-mail you but im not on your list of approved e-mail senders so could you e-mail me jkg

-- jason k godsey (jasonkgodsey@hotmail.com), September 19, 2001.

Jason, I have no "approved list" for email (as evidenced by the amount of spam I get daily). My guess is you either typo'ed my email address or your mail got lost in cyberspace. In any event, I have emailed you and you should be able to email my by simply hitting the 'Reply' button. I'll be happy to hear from you via email, of course, but it you post your question here it might not only help others but also get you better information than I might provide. I hope this helps.

-- Gary in Indiana (gk6854@aol.com), September 19, 2001.