PATERSON, NJ – Strapped for money, the city is trying to cash in on almost $10.8 million in liens that municipal officials have imposed on about 500 Paterson properties whose owners are delinquent in their taxes or fees.
The list of liens is about half an inch thick and includes folks who have not paid property taxes, sewer fees or water bills since 2011.
“You might want to check to see if you have any friends on the list,’’ Councilman Kenneth Morris said to his colleagues during their workshop meeting Tuesday night.
The city imposed the liens last year and now is attempting to sell the liens to private investors to bring revenue into the municipal coffers, officials said. “We’re looking to liquefy a city asset,’’ said city finance director Anthony Zambrano.
The City Council is scheduled to vote on the lien sale on May 22 and the actual sale is scheduled to take place on May 29.
Of the total debt to the city, $8.33 million is principal and $2.44 million is interest, according to city documents.
Morris emphasized that homeowners who are only slightly in arrears – those who owe the city less than $2,000 – are not on the list. Morris also said folks whose liens are bought by investors would pay no additional costs than those whose liens remain in the city’s hands. Either way, officials said, property owners would have to pay the delinquent amount plus 18 percent in interest to have the liens removed.
Zambrano said the $10.8 million in liens is an unusually high amount for Paterson, another sign of the difficult economic times.
Private investors never purchase all the liens, officials said. Usually the liens on the best properties in the better neighborhoods get bought. The rest remain in the city’s hands as an asset on paper that has no value in terms of paying the bills of municipal government.
Home and business owners must pay off the liens, including the interest, before they can sell their properties. Eventually, city government can foreclose on delinquent properties, but that process takes years.