No one ever expects to be burdened with sudden debt. In Texas, third-party companies are currently able to offer property tax loans, or tax lien transfers, to Texans in times of financial distress. The loan companies will pay off back taxes for qualified applicants, and prevent future delinquency by paying property tax before it reaches delinquency. Approximately 70 locally grown companies currently offer these affordable alternatives to about 15,000 Texans every year.
These property tax loans aren’t just helpful to property owners, but benefit their local communities as well. In addition to the hundreds of jobs the businesses sustain, the collected taxes ensure local governments get the necessary funds for important services like schools and public safety. Over the past three years, tax property loans are responsible for the collection of $500 million in tax revenue. By paying back taxes, these companies allow thousands to keep their homes, and continue to contribute to their local economies, yet somehow, are under threat of extinction.
Several banks and collection firms are currently lobbying to change the lien priority on property tax loans. With the lien priority being the biggest incentive for loan companies, this change would effectively shut down the industry altogether. As businesses like these have provided their services for 80 years, many believe that this change could seriously affect the Texas housing market. Local business leaders want to see the decision go to the people, the property owners who would be directly affected by the legislation.
Source: Chron
