King County homeowners facing foreclosure of their homes because of delinquent property taxes may benefit from a program implemented this month that allows for partial payments, which previously have not been accepted.
In June, the King County Council voted to create such a system, which is being implemented as a three-year pilot program. Currently, the focus is on homeowners most in need of payment alternatives — those who are three years behind in their property tax payments and thus headed for property tax foreclosure.
With this program, they will be able to make payments over a period of 12 months. Additionally, those facing foreclosure had to pay their entire outstanding property tax balance to avoid losing their homes — and that has now changed, said King County’s Property Tax Supervisor Mark Thompson.
“One of the benefits of the partial payment program is that it enables taxpayers to first pay off the oldest year (of outstanding taxes), as opposed to all the years,” he said.
The county launched the program on Oct. 3, and Thompson said that in July, treasury officials notified about 250 homeowners throughout the county about the upcoming program and received responses from 14 homeowners, including two from Vashon. Currently, county staff are working to ensure that those who responded are qualified for the program.
Thompson, noting the low participation rate, said that when the program was made available to this group of taxpayers, the 2016 foreclosure process was already underway, and many had pursued other options to pay their taxes. Going forward, he added, he expects the numbers to increase.
“We hope to see greater participation when we send an early notice in November 2016 … to homeowners facing 2017 property tax foreclosure,” he said.
The timing of that mailing will reach the affected homeowners months before they receive their 2017 property tax bill and notice of 2017 foreclosure action.
Additionally, Thompson noted that property tax payments are due each year on April 30 and Oct. 31, and typically around those dates, the number of taxpayers inquiring about a partial payment option increases.
“It is our hope that the monthly payment alternative is a viable solution for these callers inquiring about delinquent year payment options,” he added.
Program materials also indicated that in addition to higher particiption planned for next year, by 2018, the partial payment option is expected to be fully available to all taxpayers with prior-year delinquencies.
When the council voted to create this program, Councilmember Joe McDermott noted its purpose was to help those acting in good faith catch up on their taxes, prevent homelessness and help address housing affordability.
However, those close to the program say there are legal and financial requirements that may limit participation, even though they are planning for robust growth. Some of those challenges include that state law requires property owners to have paid their current year taxes and that they pay interest, a $75 setup fee and a $15 monthly processing fee. It is possible that some funds may be available to offset those fees in the future, but Thompson said none are available at this time.
King County officials opted to have a third party, Evergreen Notes Servicing, provide the processing of payments. This company also provides similar services for the Pierce County partial payment program and charges the same amount in that area.
County information indicates that the program has the potential to help many people; of the nearly 700,000 property tax accounts throughout King County, about 10,000 have delinquent prior year taxes, and approximately 9,000 of those have homes on them.
McDermott, who represents Vashon, sponsored the legislation, and in a statement when it passed, he noted that the threat of foreclosure is very stressful for families — and affects the county as well.
“This pilot approach will help to minimize impacts on cash flow for the county while we assess participation rates and the value of implementing the program,” he said at the time.
