Property Confiscation for Profit
A new national report investigates nine states whose local governments are profiting immensely from the unconstitutional practice of home equity theft.
In Passage To Liberty’s Substack article of December 11, 2022, we shared a court case and exposed the common practice of states across America stealing property to settle unpaid property taxes and keeping the excess proceeds. In that case, the justices of the Michigan Supreme Court surprisingly ruled in accordance with the Fifth and Eighth Amendments to the federal Constitution, whose property protection clauses are imposed upon the states by the Fourteenth Amendment. With its ruling, the court figuratively castrated the thieves involved in the government/private investor partnerships who perpetrate these systemic crimes against the people of Michigan. However, it was a rare ruling, considering the ongoing practices of most states.
Since we published that article, Pacific Legal Foundation has released a report on this widespread government crime. In its analysis of data it received from nine1 of the twelve2 states, plus Washington, D.C., that are openly violating the Constitution, PLF only looked at public records data from 134 taxing jurisdictions (the most populous taxing jurisdictions among home equity theft states) and focused solely upon foreclosed homes that were sold. The goal of the report was to analyze at least 33% of the population in states with city-based taxing jurisdictions, and at least 50% of the population in states with county-based taxing jurisdictions.
For the period between January 2014 and December 2021, PLF found that:
Local governments and private investors foreclosed upon and sold at least 7,900 homes during the time period.
Government entities collected approximately $26 million more than they were rightfully owed, representing a 61% premium over the owners’ actual debt.
Based upon the market value of a 5,600-home sample set, homeowners lost more than $777 million in equity by way of their city’s or county’s home equity theft schemes.
The state of Illinois- Democrat-controlled for decades- reaped, by far, the most spoils of any state: 4,719 homes and $397,191,876 in unconstitutionally confiscated home equity.
Private investors reaped approximately $250 million in surplus profits via tax lien purchases representing a 76% premium over the actual amount owed by the homeowner.
This study revealed that the methods for accomplishing their confiscate-and-convert goals varied among taxing jurisdictions, with some being more mob-like than others. According to the report (quoted):
Some localities hand over homes, for a nominal fee, to a charitable or other entity that provides low-income housing, choosing such uses over selling the property.
Some localities merely try to recoup unpaid taxes and costs, which makes them more likely to engage in a simple transfer of title or auction rather than in a competitive sale process.
Some localities generate revenue by selling quickly to get homes off their books, often taking far less than what the home is worth or even less than the amount owed.
Standing upon the Takings Clause, which enforces the principle that tax debtors have the God-given right to the equity interest in their properties, PLF is currently petitioning SCOTUS in three cases involving home equity theft:
Personal liberty is at stake, so keep your eyes upon these cases, which are scheduled for the January 6, 2023 docket. The rulings will most likely affect future challenges to illegal property confiscations by local governments.
Arizona, Colorado, Illinois, Maine, Massachusetts, Minnesota, Nebraska, New Jersey, Oregon
Alabama, Arizona, Colorado, Illinois, Maine, Massachusetts, Minnesota, Nebraska, New Jersey, New York, Oregon, South Dakota, and the District of Columbia