ATLANTA - Channel 2 investigative reporter Erica Byfield has uncovered an alarming trend sweeping through the metro area that is leaving homeowners homeless.
So-called “super liens” change the process after the tax sale of a home, allowing a lien-holder to ask a judge for foreclosure in just weeks, instead of months. And it is completely legal.
“We didn't have time to do anything,” Jessica Davis Sims told Byfield.
Sims said her family inheritance was a brick home in Cherokee County. After her father passed away, the property was left to Sims, her brother and an uncle who lived in the home.
Her grandparents built and paid off the Canton home decades ago.
Sims said she did not know her uncle was $14,000 behind on tax payments.
“We had two days and it was being auctioned off on the courthouse steps,” Davis said.
When a tax deed is typically auctioned at tax sale, there are a number of rules crafted to help protect homeowners.
Owners have one year to attempt to redeem the property. If the owner cannot redeem and loses the property, they can receive what is called excess funds— money left from the auction after the debt with the tax commissioner is satisfied.
Records show a company bought their tax deed for $130,000 in early June 2014.
The law gives homeowners 12 months to recover.
But Sims was in a different situation. An investor was able to take a “super lien” on her property.
“It's like waking up from a really bad nightmare and then it’s true — you lost your family's inheritance,” Sims said.
There was a problem: Her uncle had a medical lien.
A second company, called Trintec, bought it and the deed from the first company, creating a super lien and bypassing the waiting period.
Trintec asked a judge to let allow the company to foreclose on the property less than a month later.
“It is absolutely legalized theft,” state Rep. Scot Turner told Byfield. “I think that the people who do this are scumbags.”
Turner is backing a bill he hopes guts the industry. It would stretch out how long it takes to push a super lien through to 300 days.
“It's happening more and more because it's easy money,” Turner told Byfield.
A Channel 2 investigation found a number of companies play this game in Fulton, Gwinnett, Cherokee, DeKalb, Cobb and Clayton counties.
Cherokee County Tax Commissioner Sonya Little said she didn't believe it when she first saw it.
She will be the first to tell you paying taxes is important, but it's super liens she doesn't agree with.
“You don't rob people of their homes, it's just not right,” Little said.
She was astounded to learn these companies don’t want just the home, they want the excess money from the tax sale.
Little tried to keep Trintec from getting the excess funds in court, but ultimately lost.
“They're just making their money and they don't care who they hurt in the process,” Little said.
Sims hired an attorney and fought for a year before she gave up.
According to court documents, a judge ordered that Sims and her brother split $19,000 of the excess funds and give the remaining $94,000 and her family’s house to Trintec.
Trintec is based outside of Jacksonville, Florida.
Byfield spoke with the owner, Rob Storm, by phone. He said he did not know what a super lien was and directed Channel 2 investigators to his attorney.
Storm's attorney, John Clark, sent us this statement:
“The three Davis heirs inherited property in 2009. They elected to never pay taxes on it. My client paid two of the three heirs for their ownership and they gladly signed deeds. Those same folks, through their lawyers, agreed that my client should foreclose their uncle out of the property and signed a court order to that effect. Eventually, after not paying taxes for six years, the third Davis heir was finally foreclosed. His lawyer sent me an email stating that he would not oppose the foreclosure. He could have paid off what he owed, but simply elected not to. Had he expressed any desire to remain in the property, my client would have worked with him to keep him there.”(Read full statement here)
Rep. Turner’s bill was introduced in the last legislative session, but did not make it to the Senate floor last year in time to become a law.
Even though that law won’t help Sims, she hopes it makes it through to keep other families from losing their homes to a super lien.
“My grandparents worked hard for this house. And for it to be out of the family now is a big deal,” Sims said. “I just don’t want it to happen to anyone else.”