Tax lien sale raises $800K for Irvington

IRVINGTON, NJ — The home mortgage foreclosure crisis has been a hot topic of discussion throughout New Jersey, including at People’s Organization for Progress meetings, where 2017 New Jersey Democratic Party gubernatorial candidates Steve Wisniewski, Phil Murphy and state Sen. Raymond Lesniak have appeared ahead of the primary election set for Tuesday, June 6.

“It is a national crisis that is not being solved readily in the state of New Jersey,” said NAACP Vice President Kathleen Witcher on Monday, April 24. “Home foreclosure and debt sales for liens are rising.”

But as any good businessman knows, one person’s crisis is another person’s opportunity and that was certainly the case in Irvington on Wednesday, April 12, when Mayor Tony Vauss and the township of Irvington sold more than $800,000 in liens for abandoned properties through a special tax lien auction conducted in Council Chambers by Max Spann Real Estate & Auction Co.

“The sale of the liens is the first step in a process that will allow the properties to be cleaned up and put back on the tax rolls,” said Vauss in a press release dated Tuesday, April 18. “We are developing strong partnerships among government and residents, businesses and visitors to make Irvington the town we know it can and will be as we work together. This special tax sale we held is a significant step toward bringing this dream closer to a reality.”

According to the release, the auction attracted an enthusiastic group of bidders who purchased 53 tax liens. The auctioneer also credited Vauss’ leadership for “intelligently using the law to get these abandoned properties back on the tax rolls” and positioning Irvington in the vanguard of municipalities using recent changes in tax lien sale law to help combat urban blight in their communities.

The release stated that in 2015, Paterson became the first municipality in the state to have a special tax lien sale, raising more than $1.2 million on the auction of tax liens on 71 vacant and abandoned properties in the city. Spann handled that auction as well.

“The strong attendance and robust bidding is further evidence of the real estate market’s movement towards urban marketplaces,” Max Spann, president and chief executive officer of the firm, said in the press release.

The release stated that through Vauss’ leadership, Irvington is one of the first communities in the state to use the special tax lien sale, which was authorized by legislation signed into law two years ago. The law allows winning bidders to begin foreclosure proceedings in as little as 10 days. In a normal assignment sale this could take up to two years.

One of the key differences of a special tax lien sale is that it allows the municipality to require winning bidders to renovate the property consistent with Irvington’s plans and regulations which in turn expedites the turnaround time for the removal of abandoned properties, which are public nuisances and helps restore property values to neighboring properties and helps the township as a whole, stated the release. In addition, the Abandoned Properties Rehabilitation Act allows the municipality to sell these liens at any price as opposed to typical assignment sales being sold only for the minimum of back taxes, interest and fines.

Through the program, bidders were required to document their qualifications to rehabilitate or otherwise use the property consistent with township guidelines. But Witcher, who has been sounding the alarm about the disproportionately high number of home mortgage foreclosures in Irvington since 2007, said the wholesale selling of tax liens doesn’t sound like a good idea.

“This is all mixed up. Over and over again, for years, the township sold off liens. Some of the homeowners had not even seen notices posted in the press about their own homes before the tax liens were held,” said Witcher. “Mayor Wayne Smith, when he was in office, stated that Irvington was one of the few towns, perhaps two municipalities, conducting the sales; but since that time, more municipalities are selling off properties.

“Whether it is fair to homeowners is the question. Certainly, the auctioneer wants more business. Then he should buy an ad. Certainly, before sales occur, homeowners could benefit from more information from the tax office and perhaps, every now and then, the mayor would host a meeting with those in jeopardy of losing their homes for overdue sewer taxes or liens because of unpaid water bills.”

According to Witcher, “In this time and the economic problems we have experienced since 2008, homeowners might have circumstances that do not allow them to make full payments against debts they owe,” but that doesn’t mean that municipalities should not try to help struggling homeowners before they move to sell off their indebted properties for lack of payment of back taxes. She said that Newark, thanks to the efforts of Mayor Ras Baraka, recently allowed for a tax amnesty and perhaps Irvington should try the same thing before holding another mass tax lien sale.

“A house sitting near mine has been up for sale for months and months,” Witcher said. “Houses all around my area are being vacated. Is it better to have the houses sit and become the attractions for vandals or to have them occupied? With the huge mortgages that many homeowners have incurred, due a lot to unfair practices and greedy big bank schemes, the governments of our municipalities should think about how they can help people stay on their properties. A property is one’s life investment. And because people experience loss of jobs, ill health (and) family disruptions of many sorts, it would be much kinder to aid those in need, rather than push them out. When you see the listing of properties for sheriff’s sales around, it is disheartening, because people did not purchase homes to then be put out of them.”