City officials are considering a change in the way tax foreclosed property is sold but
some critics say the new could devastate low income homeowners.
Buffalo has one of the most generous tax foreclosure policies in New York because when the property is sold at auction, it allows the homeowners to get a piece of the sale proceeds, but the new policy under consideration would change that.
When Buffalo sells off tax foreclosed properties at the annual tax sale the city keeps only what is needed to cover the back taxes and expenses, the former homeowner is entitled to any surplus funds beyond that.
In a Tuesday hearing, city attorneys introduced a plan to Common Council members that would keep the surplus funds with the city but lawmakers, such as University District Councilman Rasheed Wyatt, said the plan needs work.
“Taking someone’s home, and the proceeds that are legitimately of that homeowner, going back to the city, that is ridiculous.”
While most other municipalities in the state do keep the surplus funds, Buffalo would stand out, said Western New York Law Center attorney Amy Gathings, because someone in Buffalo can lose their home for user fees of as little as $200.
“They work their entire lives to be able to buy a house for their family, to have something to pass down to the next generation, and they stand to lose it for as little as $200.”
Critics also told lawmakers, for low income residents, their home is their most important, if not their only asset, and the new policy could leave poor people even poorer.
Belinda Herring told city lawmakers how she lost her home because the deed was in her husband’s name and he died.
“I spoke to the city, I spoke to the mortgage company.They told me my name was not on the deed, so nothing could be done.”
The home sold for much more than the back taxes, and the surplus is going to Herring’s dautghter, “Now she will have future money to help her with her college, or to buy a car because her dad is no longer with us.”
While city attorneys tried to assure council members the new policy would allow homeowners to continue to pursue their surplus funds, they agreed the plan does need more work.
Buffalo’s Chief Diversity Officer, Shatorah Donovan said, “It is always in the city’s best interest to make sure that the residents live with liberty and their best possible lives. That is the goal 100% behind this policy.”
One motivating factor for the policy change seems to be that only a few homeowners actually claim their surplus funds, so the city loses out and the money goes to the state.