JEFFERSONVILLE, Ind. – (RealEstateRama) — Indiana Attorney General Greg Zoeller and Clark County Auditor Monty Snelling are joining forces to help prevent fraud targeting Hoosier homeowners.
Zoeller said fraudsters have found ways to victimize homeowners who fall behind on their property taxes and have their homes listed at tax sale.
In a complicated scheme recently uncovered, scammers were targeting unsuspecting Hoosiers who didn’t know they were legally entitled to receive surplus funds, which resulted from the difference between the tax owed on their property and the price it sold for at tax sale. The scammers would convince these homeowners to sign quitclaim deeds in exchange for minimal amounts in order to seemingly make their delinquent tax problem go away, while the scammers cashed in on the surplus.
Last month, the AG’s Office filed a lawsuit – for up to $12 million in restitution and penalties – against various entities for allegedly perpetrating this scheme against at least 48 vulnerable Hoosiers in Allen, Johnson, Lake and Marion counties, attempting to swindle them out of surplus funds upwards of tens of thousands of dollars.
“My office’s Homeowner Protection Unit continues to investigate this and other related fraud schemes, which we expect have victimized struggling homeowners in many areas of the state. We urge people to speak up and contact our office if this has happened to them. It is also important to educate homeowners about these possible scams so they don’t fall victim, and end up losing large sums of money on top of losing a home,” Zoeller said. “Working with county officials has been key in identifying and preventing potential fraud.”
Since the filing of the lawsuit, the AG’s Office has received numerous calls, questions and other information from local agencies throughout the state that has helped illuminate the scope of this problem.
Another version of this tax sale scam involves third-party surplus “finders” who are also in a position to take advantage of unsuspecting homeowners who do not realize they have a surplus available to them. While “finders” are legally allowed to provide this service to homeowners who have not claimed their surplus, these third-party entities must comply with a series of requirements before engaging in any such service, and cannot charge more than 10 percent of the surplus for this service under state law.
Auditor Snelling said he has seen an increase in third-party finders contacting the office who, while they may have a legitimate business, often charge for something that is already available to the property owner for free.
“If you receive a letter or are contacted by one of these companies, before you contract with them, contact our office for information. We are continually trying to put safeguards in place to protect the public and ensure they get what they are due. We want the citizens of Clark County to understand that we are here to serve them. It is unfortunate that there are so many scams to take advantage of the public. I want to thank Attorney General Zoeller for his vigilance in protecting the citizens and assisting our office in doing the same,“ Snelling said.
After uncovering these fraud schemes with the help of county officials, Zoeller worked with members of the Indiana General Assembly during its 2016 session to pass legislation to close gaps in Indiana code and better protect Hoosier property owners.
Senate Enrolled Act 355 protects Indiana homeowners by ensuring that no third-party that acquires an interest in their property will leave the original owner without the equivalent of the surplus. SEA 355 specifies that only the last recorded owner at the time the real property was certified for tax sale, or a tax sale purchaser in a situation where the property is redeemed, may file a verified claim for the tax sale surplus. It also requires additional checks by local agencies for transfers of property rights to third-parties to help ensure the homeowner is not swindled.
SEA 355 also gives the Attorney General’s Office authority to enforce current law pertaining to tax sale surplus “finders,” including the provision that bans “finders” from charging homeowners more than 10 percent of the surplus.
SEA 355 was signed into law on March 24 and immediately took effect.
Zoeller offered the following top tips to guard against fraud targeting distressed property owners:
If your property is sold at tax sale, know that you are entitled to any surplus paid by the bidder for the property that exceeds the amount owed in back taxes.
You will receive multiple notices from the county auditor’s office through the mail concerning the tax sale and availability of surplus. It is critical that you read and understand these notices. If you have questions, or concerns you can contact the Office directly to ensure you receive the payment.
Receiving this surplus is a free service. No third-party company needs to be involved.
If a third-party does contact you to inform you of an unclaimed surplus and you choose to work with the company, know that they must disclose the exact amount of surplus and cannot charge you a “finder’s fee” of more than 10% of the surplus amount. Be sure to do your “homework” on the company or person and verify the information with your local auditor’s office.
Seek legal advice from a qualified attorney before engaging in any quitclaim deed or other legal transaction. Free legal advice is available from the Indiana Foreclosure Prevention Network at www.877gethope.com or from Indiana Legal Services.
If you suspect you have been defrauded, file a complaint with the Attorney General’s Office at www.IndianaConsumer.com or by calling 1-800-382-5516.
More information about real estate-related scams is located on the Attorney General’s website at http://www.in.gov/attorneygeneral/2414.htm.
Name: Molly Gillaspie
Email: molly.gillaspie (at) atg.in (dot) gov