New Bedford Woman Loses House Over Tax Bill
NEW BEDFORD — A New Bedford woman is suing the city and a Boston-based debt collection agency for violating her rights after her Valentine Street home was sold out from under her.
Deborah Foss filed a lawsuit in Bristol Superior Court on March 29 claiming that the city sold a tax debt valued at less than $10,000 to debt collector Tallage Davis.
According to her complaint, within the year Foss' debt skyrocketed to more than $24,000, reaching an estimated $30,000 shortly thereafter.
The complaint goes on to state that this past February the company evicted her, then one month later sold the house for $242,000 and kept all of the proceeds.
She has been homeless and living out of her car ever since, the complaint reads, noting that all Foss received from the sale was forgiveness of her $30,000 debt.
California-based nonprofit Pacific Legal Foundation is providing legal counsel for Foss in her suit against the city and Tallage Davis.
The debt collecting firm is the same one involved in a 2021 lawsuit for foreclosing on a family's home in Dartmouth in a similar fashion, gaining a $330,000 home in return for forgiving a $13,000 debt.
That family's lawsuit was later settled.
Foss lost an estimated $210,000 in equity in the proceedings, equal to around 800% of the debt she owed.
Her complaint alleges that what happened to her violates constitutional protections against taking property without just compensation and against imposing excessive fines.
According to Pacific Legal Foundation Attorney Joshua Polk, who is representing Foss in the case, most U.S. states prohibit keeping all proceeds from such takings.
But Massachusetts is not one of them.
Around $56 million is taken this way from state residents each year, according to a paper from UMass Law School Professor Ralph Clifford.
Lawmakers are attempting to address the issue.
A proposed bill currently in the state's House of Representatives would require better notice of foreclosures and limit profits for tax title holders to just the amount owed.
New Bedford Ward 3 City Councilor Hugh Dunn says that he will bring up the issue at an upcoming committee meeting, in the hopes of stopping the city's practice of selling tax debts to "aggressive debt collectors."
"You see people losing their homes over a $2,000 debt, and the company keeps all of it," he told WBSM News, calling the practice "legalized theft."
"It really hits our most vulnerable residents," Dunn said. "It's just despicable."
A statement from Tallage Davis attorney Dan Hill notes that the Valentine Street property in question was owned by a trust, and after purchasing the property in 2015 the trust had never paid a tax bill.
According to the firm's statement, Tallage Davis tried to help the residents relocate, signing an agreement with them to vacate the house by Nov. 30, 2021 "in exchange for a monetary settlement."
"The sisters did not honor that agreement," Hill wrote.
In December, the company alleges, an inspection of the house found an oil spill in the basement requiring cleanup, for which the firm incurred over $75,000 in costs.
Hill added that after the residents left the house in February, they were paid the agreed settlement funds.
"Tallage has followed all of the statutory requirements governing the tax lien foreclosure process and the hazardous waste clean-up of the property," the statement concluded.
New Bedford city officials declined to comment on pending litigation, but did say that more information about the number of tax liens sold each year to debt collectors — and particularly to Tallage Davis — is forthcoming.
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