The Valley News Dispatch news story below is self-explanatory. But note, there is no mention of how the collection process would change for so called 'delinquent' homeowners. The question that needs to be asked is: Will Public Asset Managment be free to add fees to the 'delinquent' homeowners back taxes, penaties and interest. I don't know how that firm operates, but have read in other publications that another firm immediately adds $1,000 to any back taxes for each property. Which of course makes it even more unlikely the homeowner can dig themselves out of the hole...which means more sheriff sales.
Also, in the past, those homes 'delinquent' the longest were the ones that would be sold at sheriff sale first. In some areas I've read about in other newspapers, how long the home is 'delinquent' no longer determines when a property will be sold at sheriff sale. Vultures looking to get rich off someone else's misery can approach some of these collection agencies and urge them to put a more 'desirable or marketable' property up for sale before those that have been 'delinquent' longer. So the vulture can cherry pick properties. That way the collection company gets their money faster, as does the school district, county and municipal government. But is that fair to someone trying to come up with the money to dig themselves out of this alleged debt when their property is rushed ahead of other properties 'delinquent' longer, but less desirable...or in other words will bring the best returns when the vultures resell it.
New Kensington-Arnold School District sells back tax claims to agencyBy Jessica Turnbull
VALLEY NEWS DISPATCH Friday, January 29, 2010
The district will receive uncollected real estate taxes upfront — about $1.43 million — from nonprofit Public Asset Management.
There is no change in the process for the taxpayers as taxes will continue to be collected by the Westmoreland Tax Claim Bureau.
"This will be an upfront injection of cash that will be added to the fund balance," said Jeffrey McVey, business manager.
In exchange for the cash influx, the district sold its tax claims for all uncollected taxes, McVey said. That means uncollected taxes will be sent by the tax bureau to Public Asset Management instead of the district, he said.
The board voted, 8-0, in favor of the agreement. Board member Eric Doutt was absent.
A transactional cost of 5 percent — estimated at $88,200 — is financed through the lender, he said. Current delinquent taxes are valued at $850,000 while delinquent taxes for the previous three years are estimated at $830,000.
"We will be able to budget our revenue more closely each year because we will have a better idea of what our returns will be," McVey said.
The district will benefit from the initial influx of cash and also will not need to deplete cash reserves in the future, he said. McVey said he spoke with business managers at other districts such as Mercer, Oil City and Clairton who are using Public Asset Management in a similar agreement.
"The only negative one of those managers said was that once you start, it is something you have to continue with," McVey said.
Terminating the agreement before the loan is paid means the district would have to repurchase the uncollected tax claims and the steady cash stream would be ended, he said.