Candidates at odds over lien program

The prospect of their liens being sold motivates people to pay their taxes, the
treasurer says.

By PETER H. MILLIKEN

VINDICATOR STAFF WRITER

YOUNGSTOWN — Mahoning County’s system of negotiated real estate tax lien sales profits investors but unfairly triggers foreclosures on homeowners and deprives the county of its full tax revenue, according to Atty. John Shultz, who is running for county treasurer.

But the incumbent treasurer, Lisa A. Antonini, defends the program as a valuable tool to collect taxes and return tax delinquent land to productive use.

Shultz, who said he’d suspend his law practice if elected, is challenging Antonini in the March 4 Democratic primary. The treasurer’s job pays $66,233 annually.

“The treasurer is at fault for engaging in this system,” Shultz said. “This system is literally selling away this county,” he added.

Under the system, investors buy bundles of delinquent tax liens, including parcels in prime suburban areas, he said. Shultz said the system aggravates the very abandoned property problem it was designed to fix.

As an example of a flaw in the system, Shultz cited an elderly Boardman widow, whose mortgage was paid off, but who neglected to pay her real estate taxes and ran up a $5,500 arrearage over two years.

When she paid off her mortgage, nobody notified the treasurer’s office, and the bills kept going to the bank, which didn’t forward them to the homeowner, Shultz said.

An investment company, American Tax Funding LLC of Jupiter, Fla., bought the tax lien for $2,284, filed a foreclosure against her and told her she could redeem her property for about $17,000, Shultz said. The company demands full payment of delinquent real estate taxes with 18 percent interest, legal fees and court costs, he said.

The woman, whose closest relative is in Texas, applied for, but was denied, a loan; and the investor refused her offer to pay $400 a month, Shultz said.

If the mortgage on the property is paid off, there’s no legal requirement to start the bidding at two-thirds of the property’s appraised value, so the property could be sold at a very low price, he said.

When debts are discounted under this system, the county never collects full taxes due, Shultz said. “You’ve sold away the potential to collect the full amount due,” he observed.

Shultz said he’d suspend this program immediately and recruit personnel with consumer credit counseling expertise to put taxpayers on installment payment plans, collect the full tax due and keep taxpayers in their homes.

Antonini, however, said the negotiated lien sale program must bundle some high-value suburban properties with low value properties in blighted city neighborhoods to make the tax lien sale financially attractive to an investor.

By the time a lien is sold to an investor, the taxpayer has ignored four tax delinquency notices from the treasurer’s office, Antonini said.

“Now people get it — that there’s this collection tool out there — that your lien may be sold,” Antonini said of the program’s value as a payment motivation tool. “It has helped people get on payment plans so we can collect delinquent taxes,” she said.

“People have every right to work through the process,” and get on an installment tax payment plan, Antonini said. She added that her office can and has undone a lien sale and refunded money to an investor.

“We’ve grown our tax collection cycles,” under the lien sales program, she said. The county’s real estate tax collections have grown from $150 million in 2000 to $199 million last year, she said.

Tax liens have been sold on more than 94,000 parcels since 2000, but foreclosures have been filed on only 678 parcels — less than 1 percent, she said.

The program “has helped us now get these lots into the hands of the people that want to own them and clean them up,” she added.

Shultz also accused Antonini of using her office “as a political hiring station.” He cited the hiring last year of Dan Yemma as chief deputy treasurer after Yemma considered seeking the Democratic Party’s appointment as treasurer, and the hiring of Jamal Tito Brown, a former Youngstown school board member, as director of operations and community outreach specialist. Both earn $50,003 annually.

The outreach work includes participation in foreclosure prevention efforts, such as the Save Our Homes Task Force and outreach through churches and block watches, Antonini said.

“We do have very experienced individuals in that office that work hard every day,’’ Antonini said, noting that all of her employees punch a time clock.

Through retirements and buyouts, Antonini said the treasurer’s office staff has declined from 22 to 13 within the past 10 years.

“The opportunities that I’ve had to hire, we’ve hired experienced people with accounting and financial backgrounds,” she said.

“We’re doing very well” with the county’s investments, she said, adding that investment income grew 64 percent last year.