There is so much to a home that extends beyond its physical walls. A home is a place where families gather to break bread, celebrate holidays, and plant their roots. It is a place where our most cherished memories are made.
A home also offers families financial security. The home that shelters is also the investment that will pay for retirement or ease the burden of future economic uncertainty.
But for Laura Calkins and her family, both their social and financial well-being were stripped from them after they missed a tax payment of $2,004.02 and the town sold the right to seize the home to a private investment company.
Number 8 Cherry Street, Ware, Massachusetts, is where the Calkins family has called home for over 70 years.
Mere days before the country was turned on its head with the crash of 1929, Laura’s grandparents, Bernice and Albert, were married, laying the family’s foundation. The couple had spent their whole lives in Ware, so it only made sense for them to sow their seeds there.
Like many small towns, Ware was rocked by the Great Depression. The couple put off starting a family until their economic uncertainty was eased.
In 1940, they welcomed their third child into the world and decided it was time to buy a home for their growing family.
It was then that 8 Cherry Street became the family’s hearth and home. And it was in that home where they mourned the loss of both Bernice and Albert. After their passing, the home was handed down to Lawrence, Laura’s father.
After seven decades of faithfully paying the property taxes, Lawrence fell on hard times. He struggled with chronic pulmonary disease (COPD), and as he grew older, his condition worsened.
As doctor’s visits became more frequent, it became clear to Lawrence that he was going to need reliable transportation after his old car broke down. He was now faced with a difficult decision: purchase a vehicle to get to his appointments or pay his $2,004.02 property tax bill.
As her father’s health continued to decline, Laura knew it was time to move back home to care for him full-time. She quit her job and moved her two daughters back to Ware. At the time, she had no idea that the home’s property tax payments were not current.
Just before Christmas 2012, Lawrence learned that a private company was going to take his home due to the unpaid tax bill.
Lawrence told Laura, “They [town clerk’s office] wouldn’t take my money; some gentleman was interested in taking the property.”
To say Laura was shocked would be an understatement. Surely, this was only a nightmare, and she would soon wake up, relieved to find it was just a dream. It also crushed her to see her father, already struggling with his health, look so defeated. They had no choice but to hire a private attorney and get to the bottom of this. Their hope was to try to obtain a reverse mortgage on the home.
It was to no avail: The Massachusetts Land Court transferred the property in mid-November 2014.
The Massachusetts tax foreclosure statute allows local governments and private investors to seize and sell homes when a tax debt is not paid. Once the process has begun, it’s difficult to stop. But it’s not just the physical homes that get taken from homeowners.
When the sale is complete, the city or private investor not only keeps the amount owed in back taxes, interest and fees—they keep every cent of the sale and leave the former owner with nothing.
If a homeowner were to miss several mortgage payments, the lending bank would take the home, sell it at auction, keep what was owed, and give the surplus to the former owners. But in the case of tax foreclosure, the owners lose everything—their home, the equity earned, and the memories they made. We call this practice home equity theft.
This horror isn’t happening just to the Calkins family.
As our new report, Violating the Spirit of America: Home Equity Theft in Massachusetts, explains, in just one year, local governments and tax lien investors took approximately $56 million in equity from Massachusetts property owners.
The Takings Clause of both the Massachusetts and U.S. Constitutions forbid the government from seizing a person’s property for public use (like paying taxes) without giving just compensation.
In the case of home equity theft, the government or its agents take more than they are owed to cover property taxes, and then return nothing to the former owner, failing to provide constitutionally required just compensation.
To be sure, the collection of taxes is considered an important municipal function in Massachusetts, but that does not give local governments the authority to take all the equity a person has built when the amount due was less—often far less—than the home’s value.
Not to mention, the U.S. and Massachusetts Constitutions also prohibit government from imposing an excessive fine on a homeowner for the non-criminal act of failing to keep up with property taxes. Taking everything a piece of property is worth, even over relatively small debts, is almost certainly excessive.
Massachusetts is not alone in utilizing this unlawful practice. Eleven other states allow for home equity theft, but Pacific Legal Foundation is dedicated to putting a stop to this unlawful act—and we are seeing results.
In Michigan, Uri Rafaeli mistakenly underpaid his 2011 property taxes by $8.41. It seems absurd to imagine a person’s home being stolen from them over a tax bill that cost less than one month of Netflix. Yet, that is exactly what happened to Uri.
After Pacific Legal Foundation represented Uri in his legal proceedings, the Michigan Supreme Court struck down the unconstitutional tax foreclosure system in 2020 and required counties to compensate victims of home equity theft.
While Uri’s story has a happy ending, the Calkins family did not fare so well.
In July 2015, Lawrence’s condition grew so dire he had to be hospitalized. Laura was home alone when a sheriff came to her door. She was told she was being evicted right then and there. Laura and her daughters had nowhere else to go and without another home secured, she had to leave all the family’s belongings behind, including their priceless heirlooms.
She managed to grab a backpack and collect essentials for the family and their four dogs, but that was it.
Three months later, Lawrence lost his battle with COPD and was laid to rest. Laura, now homeless with two children, had to simultaneously grieve the loss of her father while looking for some way to get the family’s possessions back. She had hoped to raise her daughters in the same home where she grew up, but that dream had been vaporized by the Massachusetts tax foreclosure system.
PLF didn’t learn of Laura’s story until it was too late. While we couldn’t help the Calkinses, we are helping others in Massachusetts avoid the tragedy that befell Laura and her father.
Our clients Mark and Neil Mucciaccio of Easton, Massachusetts, were also at risk of losing their family home. As with the Calkinses, financial and medical hardships threw the family for a loop and they lost track of their tax payment. A private investment company, Tallage, eventually purchased the tax lien on the Mucciaccios’ property and foreclosed on their home.
Tallage is one of the state’s largest tax lien investors and it regularly forecloses on indebted properties, netting huge windfalls in the process. As our new report on home equity theft in Massachusetts found, “among the properties that Tallage took and then sold between 2014 and 2020, the homeowners collectively lost $37 million in equity above what Tallage paid to their locality (less than $4 million) plus the 16% interest on the liens.”
The average homeowner lost 87% of their equity—roughly $260,000 per home.
After PLF got involved in the case, the Mucciaccios were able to come to an agreement with Tallage and save their home and its equity. It was a win for the family, but the agreement applied only to their specific case.
For now, other Massachusetts homeowners are still at risk of falling prey to the state’s predatory and unconstitutional law.
But as long as home equity theft remains on the books, Pacific Legal Foundation will be ready to help families fight back.