Representatives from Massachusetts Atty. Gen. Maura Healey's office testified today in favor of legislation meant to protect elderly and disabled residents who are struggling to pay past-due municipal taxes.

Jonathan B. Miller, chief of the Attorney General's Public Protection and Advocacy Bureau, voiced his support of the legislation during a hearing in the state Joint Committee on Revenue – saying that current law puts vulnerable residents at risk.

“Unfortunately, the current statutory scheme provides limited homeowner protections,” Miller said in a prepared statement. He added that, as a result, some homeowners are “left with nothing due to a tax obligation that was a fraction of the house's value at its inception.”

Miller was referring to the tax lien bill — “An Act Relative to the Improvement in the Process for Collecting Delinquent Property Taxes” — that was filed earlier this year on the heels of a report by the New England Center for Investigative Reporting that showed an increasing number of Massachusetts' cities and towns turning to for-profit companies to pursue delinquent property owners.

Municipalities are increasingly selling tax liens as an expedient way to unload unpaid debts and access quick cash to pay for streets, roads, schools and emergency services. The practice has prompted concerns among consumer advocates that vulnerable residents were being hit with astronomical fees, sometimes losing their homes in the process.

Under current law, firms are permitted to impose 16 percent interest on debts until they are paid. If residents fail to respond, companies can file a complaint in Massachusetts Land Court to foreclose on a property and sometimes realize a huge profit. The process is made possible by a 1996 state law that allows municipalities to sell delinquent tax liens to third-party companies – individually or in bulk.

Supporters of the practice of private tax lien sales, like the Florida-based nonprofit National Tax Lien Association defend the process, saying the industry is already "highly regulated" — with Massachusetts among the strictest — and shouldn't be hindered because a "small percentage of homeowners" lose their homes. The new legislation would limit the profits that private companies make by foreclosing on homes if tax debts go unpaid.

Instead, any proceeds from a sale would go to the property owner and town, while third parties would be allowed smaller profits on interest and fees. The legislation also would require companies to more clearly explain to delinquent homeowners how their tax debts could lead to a property seizure; remove the penalty of arrest for tax delinquency; require companies that buy liens to be licensed by the state as debt collectors; and make it easier for towns and cities to help troubled residents – especially the elderly and disabled – pay what they owe.

Miller and Asst. Atty. Gen. Lisa Dyen spoke in favor of the bill, hoping to provide better communication to families and more flexibility to municipalities to come up with payment plans. They also expanded proposed recommendations – suggesting that the state reduce the interest rate charged by investors from what they called an "excessive rate" of 16 percent.

Kristen Antolini, an attorney with the Lawrence-based legal services nonprofit the Northeast Justice Center, said in prepared testimony that an increasing number of concerned homeowners are coming to her office after receiving notice from Land Court that their homes are at risk of foreclosure if they don’t pay their taxes – most of the cases being brought by private companies.

"The sad part is, many of these homeowners who contacted our office were unaware they owed any back due property taxes," she said. "And further every single person who contacted our office had no idea that they owed any amounts to a private company."