This week a Massachusetts woman filed a lawsuit challenging a state law that allows private investors to confiscate the equity that homeowners have built in their properties.

Between 2014 and 2020, Massachusetts law allowed the taking of an estimated $37 million in equity above what these homeowners owed in property tax debt.

After she fell behind on her property taxes, a private tax lien investor, Tallage Davis, LLC, foreclosed on Deborah Foss’ home, valued at $241,600, to settle roughly $30,000 in delinquent property tax debts. Instead of taking only what Foss owed and returning the rest, the state’s tax foreclosure law effectively handed the extra $210,000 to Tallage.

After depleting her life savings in the foreclosure, Tallage secured an eviction judgment against Foss and in February 2022, on the heels of a frigid New England snowstorm, she was left homeless.

“For many people like Deborah Foss, the equity in their home is their life savings,” said Pacific Legal Foundation attorney Joshua Polk. “Governments can foreclose on homes to settle back taxes, but they cannot collect more than they are owed. Doing so is home equity theft—it’s devastating, unfair, and unconstitutional.”

Deborah Foss is a 67-year-old grandmother who lives on a small, fixed income from Social Security. She suffers from several medical conditions, including chronic lymphocytic leukemia, COPD, and neuropathy. After her eviction in February, she is living out of her car.

The case is Foss v. City of New Bedford, et al., filed in the Massachusetts Superior Court.

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