Connecticut To Clobber Foreclosed Homeowners With Real Estate Conveyance Tax?

In Hartford, Connecticut, the Hartford Courant reports:

• Losing a property to creditors will get more painful next year: Some homeowners in foreclosure will be hit with a new tax. Foreclosures sales have been exempt from Connecticut's real estate conveyance tax for years, but the General Assembly is ending that break Jan. 1. The state is making the change to help close gaps in its budget, and cash-strapped municipalities are eager to get their share of the new revenue, too. But several state lawmakers say they're already dissatisfied with the change."I really believe that this is pouring salt into the wounds," state Rep. William Hamzy, R-Plymouth, told colleagues at a meeting of the banks committee Tuesday.(1)

For more, see Connecticut Plan To Lift Tax Exemption In Foreclosures Stirs Debate.

(1) I suspect that failure to pay the conveyance tax will result in an immediate lien against the foreclosed home, which will make it impossible for the foreclosing lender to transfer clear title to a subsequent purchaser until fully satisfied. So even if the foreclosed homeowner is legally liable for payment of the tax, it will actually be the foreclosing lender who will satisfy the lien when it unloads the property onto the next buyer in the chain of title (the lender will then probably be allowed to tack on the amount paid on account of the lien onto any deficiency balance owed by the foreclosed homeowner - at which point, it will have to wait for the homeowner to "hit the lottery" in order to get paid, assuming he/she hasn't already obtained a debt discharge by filing for bankruptcy).