It is important that governmental units be able to divest themselves of land they obtained via the delinquent tax foreclosure process. Otherwise the state will be (a) overburdened with real estate ( the same plight that banks are in by being “land rich” as a result of mortgage foreclosures, which, in turn, has lead to a the record number of bank failures) and (b) loose a great amount of real estate tax revenues at a time when those tax revenues are disparately needed ( taxes are not collected on real estate that is owned by the State or a county) .
However, there is a significant impediment to the governmental unit’s sale of tax reverted land. Prudent buyers of land require the protection afforded by title insurance. The title industry either (1) refuses to offer title insurance to confirm the validity of those tax reverted land sales by the governmental units or (2) publishes stringent requirements for the issuance of title insurance.
This bill would allow the governmental units to assume the functions and risks that the current title industry is reluctant to take on and thereby allow the governmental units to sell the land that was acquired via tax foreclosures. The result would free up the logjam of land owned by governmental units and returning those properties to a tax-generating asset in the private sector.