Foreclosure, Short Sale Real Estate

A few months ago the local government where my wife and I have some property sent us a "final notice" explaining that if we did not pay the local tax within 30 days our property would be foreclosed. This was an especially curious letter in that it was sent by regular mail to an address other than our home and did not require a return receipt. In other words, there was no evidence that it was either sent or received.

As it turned out, not only was this the "final notice" it was also the first. No initial tax bills had been sent because of a glitch.

The little community where the property was located was gracious about the problem, saw the error was at their end and even waived the late fee. But what if the community were not so gracious? What if the "final" notice, like the earlier ones, was never sent out or never received? Would the property have been foreclosed?

In a moment of sanity, the Supreme Court has now ruled that when government wants to take your home by foreclosure, a simple letter to a last known address is not enough when the government also knows the letter never arrived.

The case, Jones v. Flowers, involves an Arkansas resident, Gary K. Jones, who became separated from his wife. Although Jones moved to a new residence, he kept paying his mortgage and the mortgage company kept paying the local property taxes.

But when the loan was retired after 30 years of faithful payments, matters changed. The local taxes were not paid, so Mr. Jones was sent a certified letter that went "unclaimed" and then a second certified letter that met the same fate.

Even though the local government knew the letters had not been received, it still foreclosed on Mr. Jones. Arkansas courts agreed that taking the Jones' property without effective notice was just fine, and the federal government -- in a brief to the Supreme Court -- agreed that an effort to provide notice, even though obviously ineffectual and inadequate, was enough.

Fortunately for Mr. Jones -- and the rest of us -- the Supreme Court has now ruled 5-3 that government must go further when taking a home. As new Chief Justice Roberts, author of the majority opinion, put it, "we hold that when mailed notice of a tax sale is returned unclaimed, the State must take additional reasonable steps to attempt to provide notice to the property owner before selling his property."

The real issue is this: Are we to become a nation which operates on the basis of unforgiving, inflexible rules, or are we to go a little further -- as inconvenient as that might be -- and try to have government behave in a decent and honorable fashion? Do we presume that government is always right, or do citizens ever get the benefit of the doubt?

Justices Thomas, Scalia and Kennedy -- who dissented in this case -- apparently believe it's okay to take the Jones home because he failed to respond to notices he never received. In their view, presumably, it's enough that government tried, no matter how little or how ineffectively.

But citizens, in the view of the dissidents, get no such break. Fail to meet the letter of the law and you too could be homeless.

As a matter of public policy we emphasize the value of home ownership. We tell people to save and borrow so they can own property. We say this because we fundamentally believe that when people own property they're vested in their community and their society -- and that's good for all of us.

It's important to collect property taxes and it is no less important to assure that property owners have every possible right and opportunity to keep their homes. Government is too big, too powerful, to hold it to anything less than the toughest possible standards when it comes to a matter as serious as foreclosure.

The Jones decision notes that many states -- California, Georgia, Illinois, Maine, Maryland, Michigan, Montana, North Dakota, Oklahoma, South Dakota, Wisconsin, and Wyoming -- have tough notification standards in place. Even the Internal Revenue Service, said the Court, must "make a reasonable attempt to personally serve notice on a delinquent taxpayer before relying upon notice by certified mail."

The Jones case -- like the hideous Kelo "takings" decision -- should alert the public to still another instance where state and federal laws need to be changed. As the expression goes, it shouldn't be enough to merely "mail it in" when it comes to taking someone's home.

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