MAHONING COUNTY Treasurer seeks investors for negotiated tax lien sale

The county will collect what taxes it can and wipe the rest off the books.
By BOB JACKSON
VINDICATOR COURTHOUSE REPORTER
YOUNGSTOWN -- Mahoning County is looking for investors to participate in the county's first negotiated tax lien sale.
The goal, said Treasurer John Reardon, is to eliminate nearly all the county's delinquent property tax debt.
Reardon has been planning a negotiated tax lien sale for months and has now sent information to eight prospective bidders. Bids are due by Nov. 21.
In a negotiated tax lien sale, the treasurer sells the county's lien against delinquent property to a private investor who submits the highest bid, even if it's less than the full amount of back taxes owed.
The buyer then collects the delinquent tax amount from the property owner, plus 18 percent interest. If the money isn't paid within a year, the buyer can foreclose on the property to recover the investment.
If an investor buys the tax lien certificate for less than the total delinquency amount, and the property owner does not pay up within the required 12-month period, the investor can foreclose, and the balance of the delinquency is wiped off the books.
What's included
Reardon said the sale will include a bundle of about 20,000 delinquent parcels, which have a total tax debt of about $40 million. He said about 16,000 of those parcels are considered vacant and abandoned and account for about three-fourths of the total tax debt.
Because the parcels are vacant and abandoned, they show up on the county's delinquent tax records, but the county will probably never see the money.
Until recently, the law required counties to sell a tax lien for the full amount of back taxes, which made investors reluctant to bid. Reardon said when a parcel's tax debt exceeds the land value, it's nearly impossible to sell the lien.
"You can't collect $15,000 on a vacant, abandoned lot that is not worth 50 bucks. That's what we're dealing with here," Reardon said. "So we're just trying to collect what we can and we'll write off the rest."
He said the county sells only its tax lien against the property, not the property itself.
Reardon said all of the delinquent parcels in the county that are not already on a payment plan or are exempt from the sale for other reasons, such as bankruptcy or foreclosure proceedings, will be included in the lien sale. Bidders cannot "pick and choose" certain parcels, but must bid on the entire bundle, he said.
He said property owners whose land is targeted for inclusion in the sale can contact his office and either pay the tax debt in full or get on a payment plan any time before the bids are due.
"Our goal is not to take property away from property owners," he said. "In fact, we want to work with folks to get them on a payment plan that is affordable and makes sense."
Reardon said 98 percent of the proceeds from the sale will be distributed among the school districts, townships, municipalities and countywide agencies such as the Mill Creek Park District. By law, only 2 percent will go to the county's general fund.
bjackson@vindy.com