Homeless Grandmother Sues Massachusetts City Over ‘Home Equity Theft’

Bristol County Superior Courthouse, Taunton, Massachusetts, March 23, 2008. Photo by Marc N. Belanger public domain

A homeless 66-year-old grandmother is suing a city in Massachusetts for “home equity theft” after her home was seized for a tax debt and sold, but her equity in the property wasn’t refunded to her.

The legal action takes aim at what some call “home equity theft,” which is widespread in Massachusetts, according to the Sacramento, California-based Pacific Legal Foundation (PLF), a public interest law firm that’s representing the woman free of charge. PLF has stated that it’s committed to ending home equity theft across the country.

The legal complaint (pdf) in the case, Foss v. City of New Bedford, was filed on March 29 in Massachusetts Superior Court in Bristol County, Massachusetts.

In addition to New Bedford, Boston-based real estate investment company Tallage Davis also is named as a defendant.

On its website, Tallage Davis characterizes its work as a public service, stating that it “purchases past due obligations of municipalities and takes over all of the risks as well as the legal and administrative costs and obligations required in the attempt to recoup monies previously owed to the municipality.”

“In any economic environment, revenues now are better than revenues later,” the site reads. “In difficult economic times, revenues now may mean being able to afford to keep an extra school teacher, police officer, or fire fighter.”

The plaintiff, Deborah D. Foss, who has been living in her car, is challenging a state law that allows private investors to seize the equity that homeowners hold in their property over relatively small tax debts. Her car was towed because she couldn’t pay the auto insurance, but she was able to get it back with help from her son, according to her attorneys. Her family and friends created a GoFundMe page to help Foss secure housing.

Foss lives on a small fixed income and suffers from chronic lymphocytic leukemia, chronic obstructive pulmonary disease, and neuropathy. She took care of her ailing mother for the past 10 years of her life, and when her mother died, she used the money from the sale of her mother’s house—plus her own life savings—to buy a $168,500 home in New Bedford.

Foss lived downstairs and rented out the upstairs. The new home needed repairs that she couldn’t afford and her tenant stopped paying rent. When Foss couldn’t pay her 2016 tax bill to New Bedford, the city initiated a “tax taking” and 18 months later, sold its tax lien to Tallage Davis for $9,626—the amount she owed the city. Tallage Davis took ownership of the property in September 2019.

PLF attorney Joshua Polk said he’s hoping the court will make things right.

“Obviously, the government has to have some mechanism to collect what is owed, but neither the government nor a private investor has any right to collect more than what is owed,” Polk told The Epoch Times.

“And that’s a matter of constitutional law and basic human decency. I think home equity theft is cruel and unjust. And Massachusetts law shouldn’t allow municipalities to enrich themselves or wealthy investors at the expense of those suffering from financial hardship, like Ms. Foss has been suffering here. So we hope that this lawsuit will help bring an end to the practice and get some justice for Ms. Foss.”

The Epoch Times reached out for comment to New Bedford Mayor Jon Mitchell, but didn’t receive a reply as of press time.

But William P. Cowin, a principal at Tallage Davis, provided a comment to The Epoch Times, quoting from a lengthy statement issued on March 29 by attorney Daniel C. Hill of Hill Law in Boston. Tallage Davis denies wrongdoing and says it carefully followed the law.

Hill said the title to the property was held in a real estate trust since 2015 and that the trust never paid any property taxes after acquiring the property. The case went to court, and in July 2019, Foss, the trustee of the realty trust, was “given an opportunity to redeem the property by paying off the back taxes, or hire a lawyer to challenge the tax taking. She did neither, and was defaulted. The Court entered a foreclosure judgment on September 25, 2019.”

In fall 2021, after Tallage Davis assumed ownership, it tried to help the occupants relocate.

“The occupants signed an agreement under which they agreed to vacate the premises by November 30, 2021, in exchange for a monetary settlement,“ Hill said. ”The sisters did not honor that agreement.”

The next month, an oil spill was discovered in the basement, and Tallage “paid to temporarily re-locate the sisters to a hotel while the contamination was being remediated.” The remediation, documented by the state, is still ongoing and Tallage “has over $75,000 in clean-up expenses to date.” The sisters vacated the property on Feb. 1 and Tallage paid the agreed-upon settlement funds, Hill wrote.