Equity Theft

Will the Supreme Court stop real estate equity theft?  I’m talking about a situation in which a local county government forecloses on an owner who has failed to pay property taxes.  In more than a dozen states, the government keeps the difference between what was owed and what the property was sold for at the foreclosure auction.  The Court just agreed to take up the case of a Minnesota resident who owed $15,000 in back taxes and fees.  Valued at $93,000, her property was sold at foreclosure for $40,000.  The county kept all $40,000.  If the Court agrees that she should get the difference, it will have nationwide implications.  Both a federal judge and the 8th circuit court have ruled against the homeowner.  Texas doesn’t allow this practice in most cases, but it is permitted in some situations.  We’ll have to wait to see if that’s going to change.

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