Wednesday, July 11, 2012

Failure To Set Up, Pay Into Tax Escrow On Refinanced Mortgage Ambushes Servicemember/Landlord; Now Seeks To Recover House Lost In County Tax F'closure

In Pamelia, New York, the Watertown Daily Times reports:

  • A Pamelia homeowner who owed Jefferson County about $8,000 in back taxes faced the fate that is common among delinquent property taxpayers: His home was put up for sale at an auction in June and sold.

    But word of the months-long foreclosure process, a safeguard put in place to give homeowners a chance to pay what they owe before they lose their properties, didn’t make it to Christopher G. Hurlburt until the new owners showed up at the house to start the eviction process. That’s because he is a soldier who was stationed in Rwanda for almost two years.

    Complicating matters, the address posted on the mailbox outside the home didn’t match county records, meaning that mailed notifications of the foreclosure never made it to the home — though signs were posted outside in April. “There’s quite a story to this,” David J. Paulsen, Jefferson County’s attorney, told the Board of Legislators at its meeting Tuesday.

    The county now is seeking to cancel the foreclosure, on one condition: Lt. Col. Hurlburt must pay the back taxes and also pay the $7,500 fee that the auctioneer charged to sell his house last month.

    Attorney James A. Burrows, of the Watertown law firm Slye & Burrows, said his client already has paid the $8,000 in taxes and is willing to pay the $7,500 auctioneer fee, too.
    I think they’ve made a good choice, and one that certainly is appreciated by Chris Hurlburt,” Mr. Burrows said.

    Col. Hurlburt is now stateside, Mr. Burrows said, awaiting deployment to Afghanistan. He is a lieutenant colonel and was the Defense Department’s attache, its highest-ranking official, to Rwanda, a nation in southern-central Africa.

    The Jefferson County Board of Legislators passed a resolution Tuesday that would cancel the foreclosure sale once Col. Hurlburt pays the auctioneer’s $7,500 fee.

    The Servicemembers Civil Relief Act, a federal law, makes it all but impossible to foreclose on the home of an active-duty soldier. The county, though, contends that the law applies only to a soldier’s residence, and not to homes that soldiers own as rental properties. Mr. Hurlburt didn’t live in the home when he was stateside, but rented it out.

    The law does indeed apply to active service members such as Col. Hurlburt, said Mr. Burrows, his attorney. So there are legal avenues open to him to fight the $7,500 fee. But Col. Hurlburt is willing to settle with the county, Mr. Burrows said. He said he’ll discuss the matter with his client, who will have to weigh the cost and risk of a lawsuit.

    Mr. Burrows said that the issue arose when Col. Hurlburt refinanced his home in 2008. Under the terms of the original mortgage, he placed the property-tax payments in an escrow account, which then were paid by the bank. The new mortgage, though, wasn’t arranged that way.

    During his deployment, Col. Hurlburt incorrectly believed he was making property-tax payments with his mortgage payments.

No comments: