Real Estate

North Salem to Foreclose on Tax-Delinquent Properties

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Town officials say it has been at least eight years since North Salem has initiated proceedings to foreclose on properties whose owners have fallen in arrears in tax payments.
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NORTH SALEM, N.Y.--The Town Board has begun property tax foreclosure proceedings against eight delinquent property owners in North Salem. 

“There are entities for whom we collect taxes and we have to pay that even if we haven’t received them,” Supervisor Warren Lucas said, meaning that if property owners are delinquent with their payments, the town is still responsible for paying the assessed amount.

If followed through, these foreclosure proceedings, also known as “in rem” proceedings, make it so a property can be taken by the municipality and then auctioned. The revenue from the sale is then used to satisfy the delinquent taxes. In order to be subject to in rem proceedings, homeowners have to be at least two years behind on their property taxes.

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Lucas said it has been at least eight years since the town has entered such proceedings, and that in the past, the delinquent taxes are made worse by the delinquency fees, interest and penalties that accrue. 

He said 10 percent interest of the delinquent amount is tacked on annually in New York State.  

“They’re paying far more in penalties with the 10 percent compound than they are in taxes,” Lucas said.

That 10 percent penalty can make a debt become “onerous fast,” Lucas said, which is why the board intends to nip the issue in the bud now, rather than waiting for the debt to continue to grow.

“The people that haven’t paid for the last several years are becoming more delinquent and have bigger numbers to pay back,” he said. “What we’ve seen in the past is that when you let people get to the point where it becomes extremely onerous to pay back, it’s not helping them or the town.”

There are 16 properties total with delinquent property taxes, eight of which are subject to foreclosure in North Salem, he said.

Unlike other counties in New York, Lucas said Westchester does not conduct delinquent real estate property tax lien sales. That responsibility goes to the municipalities. 

“This is the only county in the state where the towns have to make everybody whole,” he added.” In Putnam, the county makes everybody whole; Southeast says ‘OK our taxes are $10 million, the county writes them a check for $10 million.’

At the Aug. 22 meeting, the board voted to commence in rem foreclosure proceedings, which simply entails notification of the property owners via mailed letters. The board hopes, however, that the proceedings don’t actually result in foreclosures. The hope is that people find a way to pay or finance their property taxes. According to members of the board, the method has proved effective in the past.

“It comes a point where you can’t ignore it anymore,” Councilman Martin Aronchick said. “This process seems to get a lot of people in compliance.”

The commencement of a foreclosure action does not necessarily mean that a home will be lost to foreclosure, and property owners have some options, according to Westchester County Clerk Timothy Idoni. 

“Filing a foreclosure action in the Westchester County Clerk’s office is the first step of a process, which could result in the loss of a home or building,” Idoni wrote on his website. “Many homeowners enter into a repayment plan, secure a modified loan, refinance with another lender or sell their home on their own to avoid foreclosure.”

Idoni also advised that those who receive a warning letter should reach out to the Department of Housing and Urban Development (HUD) to obtain the name of a reputable counseling agency.

The board approved initiating in rem proceedings at the Aug. 22 meeting; however, they said it will take weeks to initiate the process. The letters will go out sometime in September, Lucas said. 


 

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