Chasebank Jersey Foreclosure Homes For Sale

Bailed-out banks snap up tax liens

Banks that took bailout money were supposed to use part of the taxpayer-provided cash infusion to help customers avoid foreclosure, but instead, many of them are buying up struggling homeowners' tax debt.

The tax liens earn banks up to 16 percent interest, and if homeowners don't repay their debt within three years the banks can foreclose on their homes. Since the bailout in 2008, major banks have bought nearly 6,000 tax liens in Pima County that total at least $15.8 million.

Although the primary goal of the $700 billion bailout was to prop up struggling banks stung by the mortgage crisis, the government has criticized banks that took bailout money for not doing enough to help customers stay in their homes. In June, the U.S. Treasury Department withheld an estimated $24 million in combined monthly incentive payments from three - Bank of America, JPMorgan Chase and Wells Fargo - for not doing enough to help homeowners, and it could do the same for July. All three are among the biggest buyers of tax liens in Arizona.

And last month the federal inspector general monitoring the bailout issued a stinging report supporting the penalties.

Many banks dabbled in delinquent tax liens before the bailout, but they have ramped up their purchases many-fold since the housing market collapse and bailout money became available.

In the two years before the bailout, banks bought about $3.9 million in tax liens at Pima County's annual tax auction. At the last two auctions they bought $10.3 million. Additionally, they bought $4.1 million in liens outside the auction since the bailout.

Critic Adrian K. Hyde of AZTaxLienServices.com said banks should be using taxpayer money to help consumers, not to make big bucks at their expense.

"They got bailed out. Instead of making loans to people and businesses, they are buying liens with their own account," said Hyde, an investor who also buys tax liens, often in competition with the banks.

Chase, Bank Of America, Citi & Wells Fargo Allowed To Start ...

It's been a quiet 2011 on the foreclosure front in New Jersey, as several banks froze seizure proceedings late last year following the revelation that foreclosure documents were being rubber-stamped by untrained "robo signers." But a judge in the Garden State has given the go-ahead for Bank of America, JPMorgan Chase, Citigroup and Wells Fargo to resume uncontested foreclosures.

The judge issued the order after the four banks each demonstrated that they have enacted processes and procedures to ensure that information in uncontested foreclosures is based on a personal review of records. Of course, most of these processes are also part of a recent mandate from the federal government, but who's nitpicking?

A BofA rep tells Bloomberg that the judge's decision "reflects the court's recognition of the significant work we undertook beginning last fall to enhance processes designed to ensure foreclosures are being processed correctly."

Meanwhile, a rep for Wells Fargo stated, "Now that the New Jersey court has validated Wells Fargo's foreclosure processes, we will resume these practices for the benefit of New Jersey's communities."

There are still two lenders — Ally Financial Inc. and OneWest Bank — who were not included in the judge's ruling because the official in charge of reviewing the banks' practices has yet to provide his report to the court.

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