The New Tax Man: Big Banks And Hedge Funds

[Emily]

http://www.huffingtonpost.com/2010/10/18/the-new-tax-man-big-banks_n_766169.html

The New Tax Man: Big Banks And Hedge Funds

First Posted: 10-18-10 08:28 AM | Updated: 10-18-10 09:40 AM
By Fred Schulte and Ben Protess
Huffington Post Investigative Fund

Nearly a dozen major banks and hedge funds, anticipating quick profits from homeowners who fall behind on property taxes, are quietly plowing hundreds of millions of dollars into businesses that collect the debts, tack on escalating fees and threaten to foreclose on the homes of those who fail to pay.

The Wall Street investors, which include Bank of America and JPMorgan Chase & Co., have purchased from local governments the right to collect delinquent taxes on several hundred thousand properties, many in distressed housing markets, the Huffington Post Investigative Fund has found....continued at link.

Some states are allowing 18% interest rates to be charged and big fees. BOMC is grabbing up liens on Salvation Army properties, preschools and a Gulf region wildlife rehab charity. A hedge fund run by former Fannie Mae chief Daniel Mudd, has bought tax liens under 17 different corporate names.

 

[sharon sanders]

Re: The New Tax Man: Big Banks And Hedge Funds

Thanks Emily for posting. We decided to move the economics forum into the members only workshops so that people would be more free to express their personal opinions without it being googled.

About the above? Not surprised. I guess this is more profitable than hiring workers to create output.

In Florida, the owner has 3 years to pay the property taxes before a tax deed is issued to the investor. Investors bid on the interest rate and the lowest rate wins the right to pay that year's taxes and potentially gain a deed to the property if the owner does not redeem.

It is a good way to preserve the tax base so cities and counties can function. Hopefully the interest rates were bid low and in time the owners can afford to bail out their properties. I hope that wealthy individuals/corporations bid on charities' properties as a form of donation. Maybe they can be shamed into this?

Somehow this situation reminds me of the copyright trolling action that is going on:

http://www.flutrackers.com/forum/showthread.php?t=150207