Number Six wrote:There would be enough bottom feeders bidding on the Brown land and dental office if priced right, NH has plenty of those.
But "priced right" never enters into the calculation of a government auction. The government has to follow certain rules to ensure that the owner's interest (in this case the Browns) is protected to the degree that a realistic minimum bid is set. The government cannot simply sell the property for a dollar unless it can show that the
Brown's equity in the property is approximating that amount. Otherwise it would open the government up to a suit by the Browns.
Complicating the problem are the encumbrances on the property that are senior to the government's lien interests. They are not extinguished when an government auction concludes; the buyer still has to make arrangement with the senior creditors to satisfy their liens or notes against the property. As pointed out earlier, there are sizeable tax assessments on the property, in the amount of $191K and growing. How many buyers are going to be willing to take on a debt that large in addition to pay their winning bid the property? And that doesn't take into account the other creditors that surely exist, such as the lender(s) who financed Ed's nightmare.
If you peruse the Zillow link above, you find out some other amazing things about this site. Now I will be the first to point out that Zillow data is notoriously bad and vague. But you still have to gasp when you see that the structure is estimated to be at over 8800 sq ft. But you only get 3 bedrooms and baths for that kind of footage. Either Ed loved really big rooms, or he put up the walls first and was planning to add one room at a time from all the savings he was realizing from not paying his taxes.
According to Zillow, the building was erected in 1991. There is no sales history, but the assessor's office placed a value on the property at $571K in 2007. Zillow places a FMV of $850k or so on the property. Assessor values are typically behind the market trend and Zillow overprices everything. Safer to say that the property falls some where in the 650K to 700K range. But that is before we have to subtract the 191K in property taxes and whatever the Browns had left unpaid on their mortgages. Those property taxes that the Browns weren't paying? The bill ranged from $14k to $16K, according to Zillow, starting in 2007 to the present. It supposedly was in 2007 that Ed decided to stop paying the property and school taxes. So the 191K figure looks legit.
Oh, and the 191K figure is only for the residence. The Browns owe over 211K (as of last year, sure to be more now with interest accruing) to the city of Lebanon for the business property. Another priority interest that has to be dealt with. So add 250K to that the bid of 507K for the business property. I don't know if there is a perception that the business site was booby-trapped, but that could be playing into the fact that it did not attract buyers.
I'll assume that Ed was grudgingly paying the mortgage on the property. I don't recall any lender complaining about getting rubber-stamped debt cancellation notices from the Browns. But I am sure Ed has not been rendering payment since going to prison. So why haven't the lenders foreclosed and gotten this mess off their hands? Perhaps because they know they can't sell this travesty for any amount and are hoping the feds find a sucker. They aren't wasting time and money to push a foreclosure action on this. Oh, and one article pointed out that the surrounding area has problems with storm damaged trees and natural debris. Another headache for developers.
Did Ed and Elaine owe the state? Probably did. If they didn't pay the fed on S1.3 million in income (earned since 1996), I would be shocked if Ed didn't come up with a reason why they didn't have to pay the state. Hey, I just looked it up, they ran up over 343K in state income and payroll taxes. One newspaper is putting the total amount owed on the state/fed bill with penalties and interest at over 3 million.
At some point in time,the city will foreclose on the properties and can attempt to auction them off since the federal and state tax liens will be extinguished from interest in the property, thus making the bid a bit lower. Not sure if the lender will be in the picture at that time or not.
