Banks that foreclosed on Georgians owe taxpayers millions

by: Jodie Fleischer Updated:

Lenders have taken over hundreds of thousands of north Georgia homes because the owners couldn't pay.

ATLANTA - Lenders have taken over hundreds of thousands of north Georgia homes because the owners couldn't pay, but a Channel 2 Action News investigation exposed some of those same banks have skipped out on millions of tax dollars owed to local counties.

Most residents who lost their homes during the mortgage meltdown didn't have the money to pay their bills, so investigative reporter Jodie Fleischer checked on whether the banks were paying theirs.
 
Fleischer found no one kept that data, so she and a team of researchers spent months building a database. They found banks racked up millions of dollars in unpaid property taxes. It’s money that local governments need to run cities, counties and schools.
 
Month after month, properties are sold for the price of past due taxes. On the Cobb County Courthouse steps, a half-acre home in Mableton sold for about $1,000. The owner who didn’t pay the taxes was the lender that took it in lieu of foreclosure.
 
"It is basically saying to the local government, 'I’m going to ignore you and not pay my taxes to keep my costs low,’” said Frank Alexander, an Emory Law School professor who wrote the book “Georgia Real Estate Finance and Foreclosure Law.”
 
Sammie Daniels said a lender had no problem taking his home after 23 years.

“(That was) the worst day of my life, I tell you. The banks like to say, ‘If you can’t pay, you can’t stay,’” Daniels said.
 
So Fleischer and her team checked whether the banks were paying. They spent weeks digging into the history of every property owned by a lender, and found they owed more than $3 million in unpaid taxes.
 
"Arrogance, greed  --  It's astounding,” said homeowner Jeff Crawford, who was fighting to keep his home. 

He said banks taking homes from people who can’t pay is different from choosing not to do so.

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"They have the money to pay for it right now. They're waiting for somebody else to do it for them," said Crawford.
 
In fact, the Federal National Mortgage Association said taxes are paid when properties are sold. But it took Fannie Mae six years to unload one property on Tift Avenue and the $5,000 tax bill remained unpaid.
 
"It doesn't surprise me that banks may say 'Well, we are not going to invest anymore in this property,’” said Alexander. “But when they do that, they're acting just like the owners who have refused to make the mortgage payments."
 
Lenders had a wide range of excuses. They denied ownership, said county records must be wrong or claimed they were just the trustee of a property, and the company hired to pay the bills didn’t do its job.
 
Alexander said, “What they are doing there is simply saying, 'I want to blame somebody else.’”
 
Clayton County Deputy Tax Commissioner Jim Grant said none of that matters.

"Whoever forecloses, whoever's name goes on that property, that's our new taxpayer," Grant said.
 
In many cases, the banks who owned the foreclosed properties went out of business.  Security Exchange Bank owned nearly a half-million dollars when it failed, but Fidelity Bank has paid those bills.
 
Channel 2 Action News sent lists of unpaid property taxes to a dozen banks. Only Wells Fargo agreed to an interview.
 
"We pay our taxes, and when we learn about something like this, we take care of it,” said spokesman Jay Lawrence.

He said the bank will pay the taxes it owes and clear up confusion on the ones it doesn’t own.

Alexander said counties should be more aggressive with banks that haven’t paid.

"You either pay the taxes or give up the property," he said.
 
Homeowner Jeff Crawford said, “People are suffering because of what the banks and lenders get away with. By the counties not enforcing what they should be enforcing, they're part of the problem."


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