American Tax Funding was a knight in shining armor when it arrived in Schenectady nine years ago, bailing out the cash-poor city by buying up liens on hundreds of tax-delinquent properties for millions of dollars, giving the owners time to pay off their arrears and agreeing to be lenient when it came to foreclosure.
Over time, the company’s relationship with the city soured, and it has taken off its gloves and begun foreclosing on lots of properties, including owner-occupied places that were worth more than the relative peanuts it bought their liens for. That’s how a business like this makes money, and it’s not illegal. But as the Sept. 22 Gazette story indicated, there appear to have been some instances where the company was not entirely straight with property owners, many of whom say they were surprised when ATF showed up at their doors to foreclose.
These cases will be decided, appropriately, in court; and we wish the property owners well if they’re telling the truth about what happened, because no matter what disputes ATF has had with the city over the right to foreclose on unsatisfied liens, property owners who weren’t adequately informed about what they owed — whether it was principal or the exorbitant (but legal) interest or penalties ATF charges — shouldn’t be tossed out in the street.
And that’s what a number of property owners who’ve been foreclosed on have alleged: That ATF didn’t tell them, when they inquired, if there was more than one lien outstanding on their property; that ATF set them up with repayment schedules for thousands of dollars but still not enough to cover their arrears; that neither ATF nor the city informed them, when they bought a house through a foreclosure sale, that they still owed the prior owner’s back taxes.
People who get into financial trouble and don’t pay their bills, including mortgages and taxes, aren’t always straight about what they owe and what their creditors may have told them and when. And ignorance is not a proper defense, unless there are mitigating circumstances. These foreclosure victims will have to prove that there were. And if there were, here’s hoping that ATF, which says that foreclosure is a money-losing proposition, will consider giving homeowners who have the means to satisfy their liens one last chance to do so.