Patriotdiscussions wrote:Let me help explain it Gregg, the city takes the house for 500 bucks in back taxes, it then sells it to me for the 500, the owner has a year or two depending the state you are in. He has this time to pay off the taxes, but the investor is legal entitled to some interest on the money put out on the house. If he does not pay, I own the house for 500, then turn around and sell it, OWNER GETS NOTHING.
IANAL (and neither are you), but I know of no jurisdiction in which properties seized for back taxes are sold by any other method than public auction. That means that the only way you can buy that house for $500 is if you are the only bidder. If I come in and bid $600, I will get the house.
Ignoring for the moment the fact that the city/county/state is going to add foreclosure costs to the taxes owed, no government is going to simply call you up and sell it to you for the outstanding tax bill.
All that being said, the city has no responsibility, and no real interest in seeing that the homeowner receives the best price for the home. Many, if not most foreclosed homes are in pretty sad shape and don't bring much at auction, so the homeowner doesn't get very much, if anything. In addition, there may be a mortgage lender involved, who has priority over the homeowner. If a house is worth significantly more than the outstanding mortgage and tax bill, and the homeowner can't pay the mortgage or taxes, he/she would be stupid to not put the house on the market and sell it, in which case they will probably get much more, or at least be able to walk away with their credit rating intact.
None of this constitutes an unconstitutional taking of private property, nor does it prove that the property was, in fact, public property.
Some people argue that, when I take out a mortgage to buy a home, the bank owns the house until I pay off the mortgage. That is not true. The lender has a security interest in the property, but can not tell me what color to paint it, whether to put carpet or hardwood floors in the living room, or tell me that I can not sell it, or what price to ask. They CAN insist that I pay off the mortgage when I sell the house, but, as long as I pay the mortgage, they have no say in what I do with the house.
Likewise, the city/county/state has a security interest in the house, to insure that the property taxes are paid, but that does not make my house public property. Even the police, except with probable cause and/or a warrant, can not enter my house without my permission.