Last year, Robin Gordon of Marietta received some very unexpected and troubling news from her mortgage company; a tax lien had been placed on her midtown Atlanta rental property without her knowledge. Robin expected to have her mortgage paid in full in the near future, and was alarmed to learn of the encumbrance on her property title, her risk of losing the property and the implications a lien would have on her credit history. Even more confusing was that she had received no notice about an outstanding tax debt from either her bank or the Fulton County Tax Commissioner. To her knowledge, all of the taxes had been paid in full through an escrow account at SunTrust Mortgage Company.
Through some research, Robin discovered that during a tax assessment appeal she filed in 2005, SunTrust paid only 85 percent of her tax bill while the appeal was pending, a common practice among financial institutions. Though Robin was successful in her appeal, she still owed $220, which was not paid through her escrow account.
Because Fulton County is one of the few counties in Georgia that sells outstanding tax debts to third parties, Robin’s $220 debt was sold as a tax lien to a private company, Vesta Holdings. Robin remained unaware of the transfer, and when the debt remained unpaid over several years, the tax lien was sold at a sheriff’s auction to KOR Holdings, a sister company of Vesta. Robin’s bank, SunTrust, eventually “redeemed” or bought back the deed, but at a huge cost to Robin. When Robin finally found out about the tax debt last year, she was told she must pay fees in excess of $8,000 in addition to the balance owed on her mortgage.
After writing letter after letter up the chain of command at both SunTrust and the Fulton County Tax Commissioner’s Office with no luck, Robin turned to Georgia Watch.
“I was certainly angry about the whole situation and needed someone to be my advocate,” says Robin. “It was a very unfair situation, particularly because I’m not a consumer who overspent or ignored my tax obligations.”
After calls to SunTrust’s mortgage division yielded no promising results, Georgia Watch contacted the Atlanta Journal-Constitution about Robin’s story. The result was a multi-part series of investigative articles on the issue of tax liens and the allowance of lien sales in several metro-Atlanta counties.
Also at this time, Senate Majority Leader Chip Rogers, (R-Woodstock), sponsored legislation requiring tax commissioners to wait a full year before selling debts to third parties. The bill also prohibits the sale of tax debt while an appeal is underway.
Though the legislation didn’t make it through both General Assembly chambers before the end of Georgia’s forty-day legislative session, we are hopeful that it will be passed into law next year.
Unlike many property owners in similar situations, Robin Gordon’s story ended happily. After filing a lawsuit against the mortgage company for failing to pay the tax debt through her escrow account, Suntrust offered to settle with Robin and credited back the entire penalty to her escrow account.
Robin recently became a member of Georgia Watch and reached out to thank us for our role in helping resolve the dispute with her mortgage lender.
“I reached out to every politician who was supposed to represent me and only Georgia Watch acknowledged my situation and responded with care and action,” says Robin. “It’s a relief to know that Georgia Watch is out there advocating for ‘the little guy’.”
The AJC’s coverage on tax lien sales can be found here:
December 25, 2010
February 7, 2011
February 27, 2011
March 27, 2011