JEFFERSON CITY, Mo. (3/4/14)--The Missouri Credit Union Association (MCUA) is working to prevent predatory tax-lien transfer bills from progressing past committee status in the state legislature.
The bills, each of which have been introduced in the House and Senate, would allow a third-party company that paid off delinquent property taxes on behalf of the owner to have lien priority (Missouri Difference Feb. 27). The property-tax lender would get priority over the mortgage-holding financial institution should the owner become delinquent.
The companies look for homeowners who are delinquent on their property taxes and approach them with the premise they are helping them save their homes. The interest rates are high and the financial institutions are shoved to the back of the line should a foreclosure occur (Forbes Jan. 1, 2013)
Texas is the primary home of tax lenders, and the practice has become so predatory and widespread that its legislature is trying to better regulate it
"These loans are dangerous for consumers," said David Kent, MCUA director of state legislative affairs. "What many people don't understand is credit unions will work with members to protect their financial well-being and most importantly, to try and keep them in their home--even if they fall behind on their tax payments," he told News Now.