Economy Briefs: Report says some lose homes over as little as $400
The elderly and other vulnerable homeowners are losing their homes because they owe as little as a few hundred dollars in back taxes, according to a report from a consumer group.
Outdated state laws allow big banks and other investors to reap windfall profits by buying the houses for a pittance and reselling them, the National Consumer Law Center said in a report being released Tuesday.
Local governments can seize and sell a home if the owner falls behind on property taxes and fees. The process helps governments make ends meet at a time when low property values and the weak economy are squeezing tax revenue.
But tax debts as small as $400 can cause people to lose their homes because of arcane laws and misinformation among consumers, said John Rao, the report’s author and an attorney with NCLC.
The consequences are “devastating for individuals, families and communities,” Mr. Rao said. He said states should update laws so speculators can’t profit from misinformed homeowners and people who have difficulty managing their finances.
People used credit cards more in May
Americans put more on their credit cards in May than in any single month since November 2007. But overall credit card use is still well below where it was just before the Great Recession began.
The Federal Reserve said Monday that consumer borrowing rose by $17.1 billion in May from April.
The increase drove total borrowing to a seasonally adjusted $2.57 trillion. That’s just below the all-time high of $2.58 trillion reached in July 2008, seven months after the recession began.
Borrowing has increased steadily over the past two years. But most of the gain has been driven by auto and student loans. The category that measures activity in those loans increased by $9.1 billion in May to a record $1.7 trillion
A measure of credit card debt jumped by $8 billion in May. But the overall level rose to just $870 billion, only 2.2 percent above the low point hit in April 2011. The category that includes credit card debt had totaled more than $1 trillion before and shortly after the recession began.
Legal fight dropped over man’s $1M bill
IPSWICH, Mass. — AT&T Inc. has dropped its legal fight against a Massachusetts businessman whose company was on the hook for a fraudulent million-dollar phone bill.