Posted March 24, 20152:54 pm
Katherine B. Hollingsworth, a senior attorney in Legal Aid's consumer law practice group, had a letter to the editor published in today's Plain Dealer. Click here for the full copy, or read the letter below:
Kudos to the Plain Dealer's Editorial Board for encouraging County Executive Armond Budish to reassess and revamp the way the county has structured property tax lien certificate sales. ("Cuyahoga County must reform tax-lien sales program that fuels blight," Forum, March 20). The current practices are putting people's homes at risk in the short-term and destabilizing neighborhoods long-term.
As a community, we should be concerned that Woods Cove and Davenport Financial -- the companies that purchase and service the tax lien certificates -- lack sufficient transparency and fairness in their procedures. They appear to be charging homeowners excessive interest in their tax payment plans, and the payment plan agreements contain other problematic terms. In a recent case Legal Aid handled for a homeowner, Woods Cove's approach seemingly resulted in an interest overcharge and an effective interest rate of 28.43 percent, far higher than the 17.75 percent rate permitted by Ohio law. In another case Legal Aid handled, a homeowner had an interest overcharge with an effective interest rate of 28.14 percent, again far higher than the legal rate in Ohio.
The Legal Aid Society of Cleveland will continue to litigate these issues in individual cases as appropriate, but we urge the county to examine tax lien certificate sale practices as a whole and make improvements that save homes and strengthen neighborhoods. These changes will benefit homeowners now and help stabilize the County's property tax base for years to come.
Katherine B. Hollingsworth, Esq.,
Cleveland