The city will be handling foreclosures again after the Common Council decided Wednesday not to sell its delinquent tax liens to a Florida-based private company.
The city’s contract with American Tax Funding, a private company that buys tax liens, was up for renewal.
Alderman Joseph Isabel, R-1st Ward, who has been pushing the council to sell its delinquent tax liens to ATF for months, said the city and homeowners benefit from the arrangement in multiple ways because the city receives cash immediately and the homeowners are able to stay in their homes through flexible payment plans offered by the private company.
In 2006, the city sold 325 delinquent tax liens and received $1.25 million from ATF. Controller Heather Reynicke said 115 property owners took advantage of the company’s payment plans and were able to pay off their debts and stay in their homes. The rest of the property owners are still paying off their debts.
By contracting with ATF, the city would also not be responsible for the foreclosure process and wouldn’t get saddled with a vacant decaying property.
Alderwoman Kim Brumley, C-3rd Ward, adamantly opposed selling the city’s liens to ATF because she said the city would lose roughly $200,000 from interest and penalties. She also said she heard negative comments about ATF from residents whose liens were sold, including the claim that lawyer fees and interest rates made dealing with the company more expensive than dealing with the city.
“I think this can be done by our capable staff here in Amsterdam,” Brumley said.
According to Reynicke, the city would have sold about 450 delinquent tax liens to ATF this year, generating about $1.5 million in upfront cash.
Reynicke told members of the Common Council that her office would be able to handle the extra work associated with handling the foreclosure process in-house. She said the office would have to handle about 100 foreclosures because people are continuing to pay off their debts. Brumley, who previously worked as the city’s controller, said Amsterdam was not in a financial position where it made sense to sell tax liens to receive cash immediately, like the city of Schenectady, which has contracted with ATF twice.
“We have just been increased on our bond rating, and we don’t have a cash flow problem,” she said.
The city currently has $2 million left in its surplus. The half-hour debate ended with Isabel and Alderman William Wills, D-4th Ward, voting to sell the liens. Aldermen Richard Leggiero, R-5th Ward, and Daniel Roth, R-2nd Ward, sided with Brumley.
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Categories: Schenectady County