YOUNGSTOWN County to sell tax liens to recoup money owed

The county gets all its money up front while investors collect the delinquent tax amounts.
YOUNGSTOWN -- The Mahoning County commissioners' meeting room will be converted to a marketplace of sorts Thursday evening. That's where the county's second tax lien certificate sale will be.
In a tax lien sale, the county treasurer sells liens against delinquent property taxes to a private investor for the full amount of back taxes plus an administrative fee.
The investor then can recoup his or her money from the property owners at 18 percent interest, said Treasurer John Reardon. If the debt is not paid within a year, the investor can foreclose on the property to recover the investment.
"This is a win-win for our county," Reardon said. "We immediately receive the full amount of back taxes, so schools are getting their money much faster than if we foreclosed."
Reardon stressed that the county sells only its lien against the property, not the property itself.
Preferred over foreclosures: He said tax lien sales, fairly new under Ohio law, have essentially replaced foreclosures by his office. Foreclosure was not always a viable option because the cost often exceeded the amount of delinquency.
"Lien sales are cheaper, faster and more efficient than foreclosures," Reardon said.
Mahoning County held its first tax lien certificate sale in November 2000. Heartwood 88 Inc. of Fort Lauderdale, Fla., paid $1.2 million, plus a $47,988 administrative fee, for nearly 300 parcels with delinquent taxes.
Many owners pay: Reardon said the threat of having their property included in the sale prompted throngs of property owners to pay their taxes before the sale.
The treasurer's office is required by law to give property owners at least 60 days' notice of the sale. If the taxes are paid before the sale date, those parcels are taken off the sale block.
"It's the same dynamic this time," he said. "In the past couple weeks, hundreds of taxpayers have paid the taxes to keep their properties out of the sale."
Reardon said he expects to collect some $1 million in delinquent taxes before Thursday's sale, and about $2 million during the sale, which is to include more than 1,000 liens.

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