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That means a $200,000 home might fetch only $1,200, the report said. In the process, homeowners can lose thousands of dollars in home equity that they have built up by making monthly payments. It is difficult to put a figure on the number of homes sold in tax lien sales because the information is spread among thousands of local governments, Rao said. A JPMorgan unit estimated in 2009 that about $5 billion worth of tax liens are sold to investors each year, according to a transcript of remarks made at a government meeting in Kansas City, Kan. Rao said he believes the actual number is much higher. He said Florida alone sold $2 billion worth of tax liens in 2008. JPMorgan and Bank of America both said they have stopped buying and bundling and reselling tax liens but still hold tax liens that they already owned and manage them for others. For elderly people, home equity might represent their only retirement savings. Many older Americans draw down the equity in their homes over time through reverse mortgages and other loans that use home equity as collateral. People who got subprime mortgages before 2008 also face challenges staying current on property taxes. Subprime lenders are less likely to bill borrowers for the property taxes and then pay the taxes directly to the government. Instead, borrowers are expected to keep track of their taxes and pay them without help from the mortgage company. People with higher-quality mortgages tend to pay taxes and insurance to their mortgage companies as part of their monthly bills. The report is the first comprehensive study of each state's policies and procedures for tax lien sales. An early copy was obtained by The Associated Press.
[Associated
Press;
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