Banks and Hedge Funds have quietly been buying the rights to collect property taxes from cash strapped local governments. In some cases they also have the rights to go after delinquencies for water, sewer and sidewalk repair costs. In some states they are allowed to charge 18% as well as tack on escalating legal fees, often foreclosing within as little as six months if the bills aren't paid. One assumes they are also applying the same careful due diligence they have with foreclosures.
The banks and hedge funds have created new companies with PO Box addresses to hide their Wall Street connections. Some of the banks have started bundling these liens and selling them as securities (here we go again).
One company, Aeon Financial LLC adds $7,000 in legal fees and 18% in interest charges on liens as small as a few hundred dollars. The Washington D.C. Attorney General has described the Chicago based company's practices as 'deceptive at best and potentially fraudulent at worst.".
Most of the banks funding these comanpanies received billions in bailout money. The homeowners who are in danger of losing their homes over a few hundred dollars or more received squat.
The full story is here.
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