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AARP Bulletin

Predators Target Homes of Older Americans

Foreclosures tied to delinquent tax payments are a growing crisis for older homeowners

Help for homeowners

Barbara Morgan, 80, found that the Washington, D.C., home she owned with husband Al since the 1960s had a property tax bill that had already been sold to FutureGen Capital, a local company that had initiated a foreclosure action. By the time the Morgans found themselves in court, they were being asked to pay an amount more than double their $2,390 delinquent tax bill.

AARP Legal Counsel for the Elderly, which provides free legal and social work services to D.C. residents who are 60 and older, helped the Morgans negotiate a favorable settlement. In the process, LCE's lawyers discovered that the Morgans hadn't even been receiving D.C.'s property tax reduction for senior citizens, which could have cut their bill in half.

"We were just fortunate we could come up with the money," Barbara Morgan says. "But what about people who can't come up with the funds?"

Tax Liens on the Elderly

WASHINGTON, D.C.: Bennie Coleman, who has dementia, was evicted after failing to pay a $134 property tax bill. — Ashley Gilbertson/VII

Joanne Savage, a senior legal aid attorney with LCE who worked on the Morgans' case, says: "We see this too often. Many of our clients end up in over their heads with taxes, because they are not receiving the exemptions they are entitled to."

The Washington Post found numerous older homeowners victimized by tax-lien foreclosures in the nation's capital, including Bennie Coleman, a 76-year-old retired Marine Corps veteran with dementia who was evicted from the $197,000 brick duplex he'd owned for 20 years because he hadn't paid a $134 property tax bill.

But some jurisdictions have shown that it's possible to maintain property tax collections while protecting older or disabled homeowners.

Tax Liens on the Elderly

PROVIDENCE, R.I.: Madeline Walker was evicted for failing to pay a sewer bill of $496. New owners have since renovated the property. — Charlie Mahoney/Prime

See also: Is a reverse mortgage right for you?

But some jurisdictions have shown that it's possible to maintain property tax collections while protecting older or disabled homeowners.

Eight years ago, lawmakers in Rhode Island passed the Madeline Walker Act, named for an 81-year-old Providence woman who was evicted from her home just before Christmas because she had unknowingly failed to pay a sewer bill of $496. Investors scooped up the lien, foreclosed on her house and eventually resold it for $125,000.

The law requires cities, towns and other taxing authorities in the state to notify the Rhode Island Housing and Mortgage Finance Corp. of delinquent liens well in advance of tax sales. Rhode Island Housing then works with homeowners to help get tax payments back on track so they can stay in their homes.

Next page: Tax-lien landscape and law protection. »

Snapshots
From the Battle Lines

Tax Liens on the Elderly

SYRACUSE, N.Y.: Calvin James paid $9,877 in back taxes and was thrown out of his house for a lien of $936. — ©Ashley Gilbertson

  • In Syracuse, N.Y., Calvin James, 61, is renting the two-bedroom bungalow he once owned after it was foreclosed on in December for back taxes. James, a retired bus mechanic, had paid the city $9,877 in back taxes over the previous six months but still had a $936 lien in place from 2011. "I'm not against what the city is trying to do," he says, "but for $936 you're going to throw me out on the street after I've paid more than $9,000?" Kerry Quaglia, the executive director of Home HeadQuarters, a nonprofit serving central and upstate New York, says: "There needs to be some kind of safety net to help people in this type of situation. Keeping senior citizens in place is so less expensive than the alternatives."

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