New York State wants to make sure homeowners who face foreclosure for unpaid taxes don't continue to get screwed. A new Senate Bill aims to change the law to put money back in homeowners' pockets after foreclosures, rather than allowing municipalities to benefit from people's misfortunes.

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Senate Bill S9572 Would Stop Local Governments From Profiting Off Foreclosures

Senate Bill S9572 (Assembly Bill A10681) is sponsored by Senator Pete Harckham, a Democrat from the 40th District. If passed, the bill would stop the practice of municipalities keeping all of the money from a foreclosed home when it is above the tax debt that was owed. Senate Bill S9572,

Provides for the return of surplus proceeds from tax lien foreclosures to a former owner; requires 14-day posted notice prior to the public auction of a property.

 

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The bill asks a great question: why should a local government that foreclosed on a property to collect the taxes owed to it, benefit from the equity the owner had in the home? The text of the bill says that it would,

Provide relief to families whose property was foreclosed on for tax arrears by allowing them to acquire the net proceeds from tax foreclosure auctions after all outstanding debts have been paid. Just because a municipality was owed taxes does not mean it should get the windfall from outstanding equity in the property. After tax debts have been collected, with interest, there is no reason the municipality should also be entitled to the equity that the previous homeowner built up in that property.

Currently, if your home is foreclosed and sold at auction for a surplus, you don't automatically get that money back. You must ask the court to get the surplus money back. If it sells at less than what is owed it is called a deficiency judgment.

The bill is currently in the Senate Rules Committee.

Here's where New York ranks compared to other states for property tax revenue

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New York is among the top 15 states with the highest property taxes, but we landed just outside the top 10.

New York Ranks #11 Among States That Collect the Most Property Tax Revenue

Property tax as a share of total general tax revenue: 18.9%
Annual property tax revenue (per capita): $3,180
Annual property tax revenue (total): $61,857,624,000
Annual general tax revenue (total): $327,909,409,000

We may complain (and, rightfully so) about how much money we have to pay in property taxes, I mean when you compare the per capita amount we're not that far off the #1. But at least New York we're not #1. We gotta find something to laugh about, so we don't cry!

You can see the full list at Porch.com.

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