Mass. Senate backs end to ‘home equity theft’

Greenfield residents Joan Marie Jackson and Mitchell Speight testifying online last year in support of a bill that would provide homeowners with any equity remaining beyond their tax debt owed in the event of a tax lien foreclosure.

Greenfield residents Joan Marie Jackson and Mitchell Speight testifying online last year in support of a bill that would provide homeowners with any equity remaining beyond their tax debt owed in the event of a tax lien foreclosure. CONTRIBUTED/AL NORMAN


 Staff Writer

Published: 05-31-2024 1:07 PM

The state Senate unanimously passed an amendment to its annual spending plan that would prohibit municipalities and private companies from taking the entire equity of a home in the event of a tax lien foreclosure, a piece of legislation that, if signed into law, would end a practice critics refer to as “home equity theft,” in Massachusetts.

The U.S. Supreme Court ruled that the practice, in which municipalities or private tax lien companies can foreclosure on a property for delinquent tax payment and then sell it and keep the excess profit, was unconstitutional last year in the Tyler v. Hennepin County, Minn. case. Hampden County Superior Court Judge Michael Callan ruled on April 18 that takings of excess equity under Massachusetts state law violated Article 10 of the Massachusetts Constitution's Declaration of Rights and the Fifth Amendment to the U.S. Constitution.

Last month, the Joint Revenue Committee voted in support of an equity theft bill (H 4624), which incorporates aspects of eight other bills, including one sponsored by Sen. Jo Comerford, D-Northampton. Comerford said she co-sponsored bill S. 921 earlier this year on behalf of her Greenfield constituents, who she said had been the subject of home equity theft.

“The court famously said ‘Render to Caesar only what is Caesar's,’ meaning that cities and towns cannot sell a home and get all of the equity they simply have to get the back taxes paid,” Comerford said. “We had to pass a bill that would end this practice in the commonwealth because it affects the most vulnerable people in the commonwealth. We are robbing them an opportunity for housing security and also a generational wealth transfer.”

Comerford said the bill will be brought before a conference committee comprising three House of Representatives lawmakers and three senators in the coming weeks, with the amendment expected to be brought to Gov. Maura Healey’s desk alongside the state fiscal year 2025 budget in July. Last year, Comerford joined Greenfield residents Joan Marie Jackson, Mitchell Speight and Al Norman on the Joint Committee on the Judiciary to testify in support of bill S. 921. 

Theater consultants Jackson and Speight paid off the mortgage on their Greenfield home in 2012. They testified that they fell behind on their property taxes when the COVID-19 pandemic shut down theatrical productions and they were served a Notice to Quit by a law firm hired by the city in 2021. The letter, Jackson said, mentioned they would be evicted by Western Housing Court if they did not vacate the premises by Feb. 2, 2022. Jackson said they received a second Notice to Quit within 14 days of the first one.

According to Jackson’s testimony, she and Speight presented a $20,000 bank check to Greenfield’s tax collector, but it was rejected, leading them to hire an attorney.

“This partial payment would have greatly reduced accruing interest on our outstanding obligation,” Jackson said in her testimony last year. “It was not until we hired an attorney that the city of Greenfield began to cooperate, which was in December 2021. In addition to what we owed in taxes, we had to pay our own lawyer’s bill to defend our rights.”

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The Senate amendment, if passed by the governor, also would require the Department of Revenue to notify property owners in writing of a foreclosure with information outlining the owner’s rights and responsibilities in simple language and cut in half the current 16% interest rate applied to tax debts. It also would double the time property owners have to pay their tax debt from five to 10 years and allows tax collectors to wave accrued interest on debt.

In an interview Tuesday, Speight said he was pleased with the amendment, noting that by obligating municipalities to return excess equity collected from the sale of foreclosed homes would prevented them from taking part in what he said were ‘intentional” and “unconstitutional” practices. 

Speight also said he believed the interest rate reduction was “fair” and that the change from five to 10 years to pay off tax would allow property owners some “breathing room.” He said he opposes portions of the amendment that require property owners to request their excess equity in writing, as he believes it should be the responsibility of local governments to return what they owe property owners.

The amendment also calls for an examination into the excess equity losses in property foreclosures three years or more prior to the 2023 Tyler v. Hennepin County ruling. Speight said he believes the analysis should extend to at least 10 years and should examine property rights for heirs to previously-foreclosed property.

“This practice has been going on for decades [...] there are heirs to property that was taken illegally by municipalities. The heirs to these properties should be entitled to the excess equity — this is a clear violation of property rights,” Speight said.

Comerford said that between 2014 and 2020, 250 homeowners in the state collectively lost $60 million in home equity due to the foreclosure and sale of their homes over tax debts. In an interview Tuesday morning, she added that the tax burdens her Greenfield constituents faced during the COVID-19 pandemic were not unique to them.

“Mitch [and] Joan, their difficulties began during the COVID pandemic, like so many people's difficulties. They built a tax bill during the pandemic, but they would have lost more than $100,000 in home equity if they hadn't prevailed and won in their fight to not have Greenfield sell their home for taxes and take all of the money,” Comerford said.

If passed, the amendment will go into effect Nov. 1, 2024.

Anthony Cammalleri can be reached at or 413-930-4429.