States With Highest Paying Liens?

Comments(7)

• 
  elissnurse18th November, 2003

  If you are asking for the highest POTENTIAL return, I believe it is Illinios at 26% per annum. I am trying to find more information on them myself.

• 
  MarleneM18th November, 2003

  Last I heard about Illinois is that the application for participating in their auction had an October deadline.
  
  We might be out of luck with that state until next year - or perhaps not - if someone else here knows more than I do - which is likely
  
  Thanks for your answer.
  Marlene

• 
  GlennI19th November, 2003

  The max rate in Illinois is 18%. I believe Iowa has the highest rate.
  [addsig]

• 
  elissnurse19th November, 2003

  Iowa is 24%, did IL recently change its program?

• 
  GlennI19th November, 2003

  I only know the procedures for 3 counties in Illinois (all in the ChicagoLand area).
  
  In each of these counties the rates start at 18% and are bid down (sometimes to 0%!).
  
  According to the State Statues (Chapter 35 Act 200) that I have read and discussed with county treasurers and the country attorneys, 18% applies across the entire state. I do not know when/if the rates where changed.
  
  Glenn
  [addsig]

• 
  elissnurse19th November, 2003

  thanks for the information.

• 
  richen20th November, 2003

  First of all, please make the distinction between interest and penalties. In an interest rate, the interest is calculated based on the time period the lien is outstanding. For example in Iowa where the inteerest rate on tax liens is 24%, if you owned the lien for two months prior to redemption, you earned 4% of the amount you invested in interest. However in a penalty situation, such as in Georgia, where it is 2-% penalty, the owner pays you 20% on your investment after your purchase of the tax lien, whethr it is one day after you purchased it or 364 days after you had purchased it. So if it is redeemed after 2 months, you earned 20% over your investment, which annualized, would give you an interest rate effectively of around 120%! So make sure you understand the difference.
  
  in interest rate states, Iowa pays the highest currently at 24%. The bidding system is by lottery, in most counties, and different in others, so check first. The bidding is to bid down the percentage of ownereship. However, this is seldom done, as veterans will drive down the newbies to 1% ownership once that starts, to avoid such actions.
  In penalty states, the highest is Texas which pays 25% penalty for a 6 month redemption period, thereby providing a miniimum of 50% effective interest rate return. The next is Illinois at 18% penalty every 6 months with a 2.5 years redemption period that can be extended by the tax lien buyer for another 6 monthw to a total of 3 years. But this is bid down at the auctions. Currently most properties that are decent are bid down to around 2-3% per 6 month period. The subsequent taxes carry a 12% penalty per year. Georgia is third highest at 20% penalty for the first year and 10% additional for the second year on a one year redemption period.
  
  RC