A Nebraska man whose home was foreclosed over a small property tax debt is finally getting his home back after a years-long legal battle that nearly cost him his home and all of its value beyond what he owes the government. I got it back.
In 2014, Kevin Fair was unable to pay $588 in property taxes after quitting his job to care for his dying wife, Terri, who was diagnosed with the debilitating disease multiple sclerosis. . The following year, Scottsbluff County government secretly sold the bonds to private investor Continental Resources, which continued to cover the Fairs’ property taxes — until the company sent them a bill for $5,268 in 2018. .
Families must pay the total amount (tax debt plus interest and fees) within 90 days or lose their homes. You’ll also lose all your equity, even if your home is worth about $55,000 more than you borrowed.
It was business as usual in Nebraska, one of many states with legalized home equity theft. “People are shocked about how the law actually operates,” said Jennifer Ghosn, director of legal strategy for Legal Aid Nebraska. said This law was truly shocking. Local governments were allowed to sell tax debts to investors without writing to the debtors. Three years later, as with the expo, the investor will mail a new bill to the property owner, but of course the bill has increased significantly, with 14 percent interest and Other fees were included. If the owner fails to pay within 90 days, the county treasurer will give title to the home to an investor, who will take possession of the home, sell it, and keep the change.
“Usually it’s older people…people who own their homes outright without a mortgage, and there’s usually some kind of intervening situation,” Ghosn said. “It’s not just poverty. It’s a disease or something going on in their life…and they don’t realize it. And… [the home] It’s taken. ”
Fair Traders filed the lawsuit, arguing that losing equity in their homes in excess of their debts violates the Takings Clause of the Fifth Amendment, which states that the government may not seize private property “without just compensation.” I woke you up. The two lost numerous cases, including before the Nebraska Supreme Court.
The U.S. Supreme Court considered this issue in 2023. The plaintiff in the case, an elderly woman named Geraldine Tyler, had to pay $2,300 in property taxes on her Hennepin County, Minn., condominium after several incidents in her neighborhood, including a nearby shooting. was in debt. To move into a retirement community. Unable to cover both her rent and debt, the total amount, with penalties, interest, and fees, reached $15,000. The local government foreclosed on her condo and sold it for $40,000, keeping a profit of $25,000. The U.S. Court of Appeals for the Eighth Circuit ruled that’s not the case.
The High Court justices unanimously dissented. Chief Justice John Roberts wrote: “A taxpayer who loses his $40,000 home to the state in order to satisfy a $15,000 tax debt has made a financial contribution far greater than what he owes.” said. I wrote. “Taxpayers must give to Caesar what is Caesar’s, but no more.” Mr. Tyler was 94 years old when the decision was made.
With this decision in mind, the Nebraska Supreme Court reconsidered its previous decision and ruled that Mr. Fair did not have to sacrifice additional equity in excess of his debts. However, whether he would be able to retain the title remained unclear until late last month when he reached an amicable agreement with Continental Resources.
“Kevin was so happy and relieved that he was able to recover.” [the] “He was given title to his home,” said Christina Martin, a senior attorney at the Pacific Legal Foundation who represented him before the Supreme Court. “And he was unable to keep it for years. “We were very grateful and touched by the support from the local community.” I’ll come. ” gofundme An organization formed last week has raised funds to help pay off outstanding debt and apply for a homestead property tax exemption in Nebraska.
Despite the U.S. Supreme Court’s decision and the Fair State’s favorable ruling in Nebraska, some states are still trying to find creative ways to circumvent the law’s provisions. “Illinois and Washington, D.C. are the most blatant persistent offenders,” Martin said. both sell a tax lien For individual investors, it’s similar to what happened at the fair. “And while five states have theoretically stopped home equity theft, the time it takes for owners to claim surplus proceeds is so short that most states won’t be able to get the money back on their own.” ” she added. Chelsea Ketter, a single mother in Michigan, was behind on about $3,800 in property taxes in 2018. So the government seized her home in 2021, sold it, and Maintained profit of $102,636This is despite a 2020 Michigan Supreme Court decision making the practice unconstitutional.
It’s a feature, not a bug, thanks to its complex mechanics. debt collection law The Michigan Legislature passed this ruling. ” After foreclosure, before the property is sold or the surplus amount, if any, is known, the owner must properly submit a notarized and completed invoice to the foreclosing government agency within 92 days. Must be. ” is written. lawsuit Koetter filed the lawsuit with the Michigan Supreme Court. “About a year after the foreclosure, and several months after the property is sold, owners must file another claim for a share of the surplus proceeds in the foreclosure case that took them from their home.” That labyrinthine process If you get lost and miss the deadline eight days late, like Mr. Koetter, the government will claim your excess stock and you’re doomed.
Thankfully, Mr Fair no longer has to worry about that, and more than six years after it began, his nightmarish ordeal has finally come to an end. It’s a bittersweet ending, as he will now enjoy that security without his wife, Terry, who died during the protracted litigation.
