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Florida tops nation in tax liens for sale; foreclosures a problem

There sometimes seems no end to the cast of shady characters who readily seek to prey off debtors facing extreme financial challenges. We have chronicled some of the individuals and companies that pitch redemption stories that simply aren’t true or peddle false hopes to people in desperate need in past select posts. They range from pure scam artists to pseudo-legitimate entities that help a few debtors while ripping others off.

One category of unseemly entrepreneurs we haven’t visited -- until today -- was recently described in a Washington Post article as “a new breed of well-funded investors … taking advantage of distressed homeowners.”

Here’s their business strategy, and it’s a simple and ruthless one: When local governments sell tax liens to garner some revenue from past-due property owners, these groups -- typically well-off individuals or collectively financed groups hiding behind limited liability companies -- step in and purchase the liens at deep discounts. They then go after the homeowners with a vengeance to collect the debts, often charging high amounts of interest and legal fees. In many instances, they initiate foreclosure actions on properties.

In short, the scheme is a pure ploy to extract money from financially burdened home dwellers, and it is a growing practice.

Unsurprisingly, and given the severity of Florida’s oft-noted foreclosure problems, the state tops the list for most such liens.

In fact, it isn’t even close. In 2012, there were reportedly 649, 976 tax liens for sale in Florida. In New Jersey, the state appearing in second place on the list, there were slightly more than 154,400 liens up for sale.

From a more localized perspective, no other county in the country comes close to Miami-Dade County for the number of liens up for sale last year. That number stood at a whopping 57,000.

Pressured homeowners who are concerned about foreclosure or already being harassed by outside parties such as the lien holders described in this post can receive prompt and confidential information, as well as diligent representation, from an experienced Florida bankruptcy attorney.

Source: The Washington Post, "Local laws do little to protect homeowners," Alexia Campbell, Danielle DeCourcey and Ted Mellnik, Dec. 8. 2013

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