Christina Campbell spent a recent evening sitting in her attorney's office, weeping. She talks about struggling to make the mortgage on her Seventh Street home while also trying to pay the doctors' bills that began to mount after her husband's 2002 heart attack. Her husband has been unable to work since then, she says, and her financial problems only got worse when she lost her job at a local grocery store in 2011 after 20 years of employment.
"Along with losing my job, I lost our insurance," she says.
In 2007, Campbell and her husband fell behind on their property tax payments. In 2009, the delinquency enabled a Great Falls-based company called Montana Land Project to purchase the outstanding tax debt, which then totaled $4,772.87, through what's known as a "tax-deed process." This legal maneuver allows a third-party investor to purchase outstanding property tax debt and take possession of a home.
Investors find such transactions attractive because they reap 10 percent interest annually, says Missoula County Delinquent Tax Clerk Annie Cathey. If homeowners don't pay off a tax lien within 36 months, investors assume the deed and, potentially, yield an even larger return.
The process motivates people to pay their taxes and therefore serves as an important enforcement tool. But the economic decline that first hit the Missoula area in 2007, combined with the lure of a predictable investment for companies like Montana Land Project, is causing more and more local residents to lose their homes to profit-minded investors.
In 2010, the Missoula County Treasurer's Office issued three tax deeds to outside investors. In 2012, 12 such deeds were issued, including the one attached to the Campbells' home.
Campbell, 58, is scared because the Montana Land Project is foreclosing on her house, which is valued at $197,000. She knew she was delinquent on her tax payments, but says the notifications she received from Montana Land Project were confusing. She didn't understand that she was in imminent jeopardy of being foreclosed upon. "I didn't understand all of the legal wording," she says.
In January 2012, when she sought advice from Missoula attorney Doug Austin, Campbell began to understand the seriousness of her situation. The attorney agreed that Montana Land Project's legal notices were confusing. In October 2011, for instance, the company notified the Campbells that they could pay off the debt and keep their house until Dec. 19, 2011, or, as Austin points out in a legal filing, "on or prior to the date on which the County Treasurer will otherwise issue a tax deed."
Austin notes that the county hadn't officially assigned the deed to Montana Land Project when, at Austin's urging, Campbell on Jan. 17 drained her retirement account to pay the tax bill, which by then totaled $12,711.89, including interest and penalties.
The Campbells hoped they could still keep their home, but Montana Land Project said they missed the Dec. 19 cutoff. Missoula County Deputy Attorney Dori Brownlow agrees, telling the Independent that the company has followed all legally mandated notification requirements.
At an impasse, the Campbells in December 2012 filed a lawsuit against Montana Land Project and Missoula County. They argue that because the notices were unclear, the Campbells should be allowed to keep their home.
The lawsuit comes on the heels of two other high-profile local tax-deed foreclosures. On March 9, 2012, John Jeffery Parsons, 56, blew himself up in the Kalispell home he was losing to the Montana Land Project through the tax-deed process.
In 2011, Virginia-based Mooring Tax Asset Group evicted longtime Missoula resident Betty Museus from her Park Street house. Museus had paid off the home, which was valued at $264,700. MTAG purchased the tax lien for $5,822.09.
Museus was an elderly recluse who didn't open her mail or answer her door, says Missoula City Councilman Jon Wilkins, who lived near Museus and expressed outrage in the wake of her eviction.
In 2011, Wilkins and another neighbor, Missoula City Attorney Jim Nugent, vowed to call upon the Montana Legislature to craft a new legal provision that would better protect people like Museus, who might not understand the tax-deed process and its implications.
At the request of Wilkins and Nugent, Missoula Democratic Rep. Ellie Hill last week introduced House Bill 526, which would have required that county law enforcement personally deliver final tax-deed notices and report back with a written summary of observations noted during the visit, including "the owner-occupant's apparent alertness and ability to understand the ramifications of the final notice."
Campbell says that such a visit might have impressed upon her the severity of her predicament. "There may have been other things that I could have done, but I didn't understand these notices," she says.
During a hearing on HB 526 last week, Montana League of Cities and Towns Executive Director Alec Hansen said that all 126 members of the league voted unanimously in favor of the increased notification requirements.
Montana County Treasurers Association lobbyist Ronda Wiggers, however, highlighted the fact that state law already requires individuals in jeopardy of losing their property be contacted multiple times during the three-year redemption period. She also said the legislation would place a costly burden on law enforcement and county treasurers to perform duties that they're not necessarily equipped for.
The legislation died in committee, leaving Wilkins to regroup.
As for Campbell, she'll press on with her lawsuit. She doesn't see any other option. If she's forced out of her home, she says she doesn't know where she and her husband will go.