I thought counties enforced property tax payments. They can even foreclose and sell the property for unpaid taxes. Some investors buy these properties and flip them.
I could be wrong about thhis state. Not sure.
Banks and investors don’t want to realize the loses on CRE properties.
It has to be massive.
The city would bundle its most marketable liens into securities for sale at a discount to a third-party trust, which borrows money from investors to pay the city upfront, according to Bloomberg. The trust then assumes responsibility for collecting the debt, plus additional fees and interest payments, so that after investors are paid back, the city can continue collecting additional revenue from those added costs. New York Attorney General Letitia James criticized those fees back in December 2020 for having the ability to “quickly turn a relatively small tax lien into an overwhelming financial burden, eventually pushing homeowners into foreclosure.” She cited the mandatory 5% surcharge, legal fees, and a 9% or 18% interest rate that compounds daily, according to Bloomberg
Gee, did the City follow all the regulations and disclosures for securities sales? Paging AG James……
if no one is buying then no one is flipping. one of my friends moved way out of town and told me there are lots in his area that have been at tax auction for years but no one is buying even the tax liens. location is everything in real estate.
I can’t speak for New York, however, in Connecticut, each individual town or city handles it, as Connecticut doesn’t technically have a county form of government.
You are correct. Counties put tax anticipation certificates up for sale. The property can be redeemed by payment of the tax plus interest. If you know what you are doing you can make a pretty penny at it.