Since Erie County got back into the tax foreclosure sales business nearly two years ago, the county has improved its record of property tax collection.
In 2012, the county collected $6.7 million following what’s called an “in rem” auction on foreclosed properties.
Last year, the county raked in $10.3 million after holding two such sales.
This is compared to a paltry $1.8 million that was taken in by the county in 2008, a few years after the county first began selling its tax liens to a private, New Jersey-based company.
“We’re talking about a step in the right direction for Erie County,” County Executive Mark C. Poloncarz said, during a news conference Monday in the Department of Real Property Tax Services office at the Edward A. Rath County Office Building, 95 Franklin St.
The county executive wanted to call attention to the fact that since the policy change, more delinquent taxes have been collected and more delinquent parcels returned to good standing as homeowners who are in arrears begin working with the county to save their homes from foreclosure.
“In 2012, one of the aspects of my administration was to ensure that we took a more responsible proactive role in ensuring not only that the taxes were collected, but that we were keeping people in their homes,” Poloncarz said.
The county got out of the tax foreclosure sales business during the administration of former County Executive Joel A. Giambra, which sold the county’s liens to a company called Xspand, a subsidiary of Bear Stearns.
“It was really a one-shot, which the county received a chunk of change up front for the right of this company to purchase the tax liens that were owed to the county,” Poloncarz said.
“We looked at it and thought it was a bad deal for the county when I was comptroller,” he added.
Xspand, Poloncarz said, was not foreclosing on properties it should have and they became zombie properties.
“They had so much owed in taxes that it became impossible for the homeowner to pay off the taxes,” he said.
The county’s two in rem sales in 2013 helped generate $10.3 million in revenue, which would bring in $4.75 million more than was budgeted.
By restoring Erie County to the old in rem process, the county was able to realize $6.7 million in property tax-related revenue in 2012.