Town May Auction Tax Lien Debt [POLL]

Westborough town officials are exploring the possibility of auctioning off tax title liens. At the April 24 meeting of the selectmen, Treasurer Collector Joanne Savignac explained to the board why this type of program is under consideration.

“It’s another method of collecting some of these past due accounts,” she said. “Massachusetts law allows communities to sell tax title liens at auction…Worcester has been doing this for about 15 years.”

Savignac told the board that approximately 60 of the estimated 5,300 properties in town are delinquent on property taxes. The past due money totals about $388,000, she said.

She explained that when a property owner is delinquent in paying property taxes, town officials may put a lien on the property. A lien allows the town to take priority to collect past due money in the event the property is sold. Within six months of putting a lien on a property, she said, the town can file for foreclosure on the property in land court. Doing so costs $515 for filing in addition to legal fees.

If auctioning of tax title liens is permitted, a company or individual will be able to bid at auction on the outstanding debt on a property. The minimum bid will include any interest and legal fees associated with the past due tax amount, Savignac said.

Once the auction is finalized, the town will receive the outstanding tax money. The owner of the debt may then move forward to collect the money from the homeowner or foreclose on the property.

Currently, the town has moved two of the 60 delinquent properties into land court.

“It’s a way to push ahead the revenue,” Savignac said. “Sometimes these things languish for a number of years. Certainly, going through the land court process does take a number of years.”

“Do you normally try to work with people?” asked Selectman Leigh Emery.

“I do. We have a couple of accounts now that are on payment plans. Some have set up a payment plan and did not follow through,” Savignac said.

She said there are currently two mortgage companies, and Federal Home Mortgage Company, that own foreclosed properties in town and are delinquent on the property tax.

said that the discussion was brought before the selectmen to see if there were any issues or concern before moving forward on the idea. The board agreed to take the idea under consideration.

Malloy then commended Savignac for the outstanding property tax collection rate in Westborough.

“We have 99 percent [of properties] that are being collected, which is excellent,” Malloy said. “We levy about $52 million and we’re talking about $388,000. That is fantastic."