Illinois State Tax Lien Auctions Working for the People Again

By: Brent Crouch | Posted: 07th December 2010

County tax lien auctions are never pretty, but one Madison County, Illinois, auction has become messier than normal. Republican members of the Madison County board have claimed that the auctions themselves were set up to undermine honest homeowners who, due to unfortunate circumstances, ended up paying their property taxes a bit later than normal. It's not so much the concept of the auction that is feeding the fury of GOP board members, but the way in which the auction was conducted.

Citing one newspaper article that specifically stated the format contributed to much higher interest rates than normal, many board members have now requested access to records and documentation associated with the sales.

In some cases, interest rates were said to have shot up to eighteen percent, leaving open the possibility of real harm to residents, fraudulent acts by the new lien holders, and even loan sharking against homeowners. In addition to records access, GOP board members have also requested a formal investigation by the Illinois Attorney General as well as the US Attorney's office.

Illinois state law may have led to some of the confusion. Tax buyers are actually allowed to bid up to eighteen percent interest for paying the tax debt to the government, and the laws are not entirely clear as to how the auctions themselves should be conducted. Board members, however, suggest that auctions under former county treasurer Fred Bathon were less than fair.

Rather than a standard auction, the property would simply be announced and the first to yell out a response at the lowest interest rate would have first rights to buy. This did not allow for further bidding, which likely would have lowered the interest rate to be paid by the homeowner. The concern here is that when homeowners are already having difficulty stabilizing their financial status, hitting them with the outrageous interest rates only serves to push them further under.

Already, however, things are beginning to change within the county. A new treasurer has been appointed, and he's worked to overhaul the entire auction process, including the behavior during sales. Now a true auction takes place until the lowest interest rate is called out and the "winner" of the individual sale is named. He or she buys the debt, then takes rights to the tax lien and is able to collect on it.

Fred Bathon, the former treasurer, has taken much slack for the corrupt way that auctions were handled during his reign, but he still defends the eighteen percent penalty, even in cases where taxes are just a few days late.

Brent Crouch is the owner of Government Tax Sales. He has dedicated this site to providing a free state tax lien list.
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Tags: confusion, board members, lowest interest rate, property taxes, newspaper article, tax debt, unfortunate circumstances