Home equity theft
Home equity theft is a method by which governments can remediate property tax debt by acquiring a person’s home, selling it to a third party, and keeping all the money, including any excess above the debt. It's the equivalent of taking the cake in payment for one cup of sugar.
As ruled in 2023 by the U.S. Supreme Court, this practice violates the Fifth Amendment’s takings clause. Legal traditions of our nation and state laws recognize that home equity is private property. When a government confiscates this type of private property and keeps the surplus for public use without compensation, a taking occurs. These takings can and do occur for tax bills of only a few dollars, with many states delivering poor notification to the debtor.
The majority of states already recognize the unconstitutional nature of home equity theft, prohibiting the sinister funding method. These states recognize that permitting home equity theft creates a double standard for government and private creditors. In every state, private creditors are required by law to return excess value to debtors after seizure and debt satisfaction have occurred. However, for the twelve states with home equity theft and the nine with loopholes, there is an exception for government lenders.
Read more:
https://www.mountainstatespolicy.org/...