Seventeen foreclosed Fairbanks properties sold, 25 drew no bid

The Fairbanks North Star Borough sold 17 tax-foreclosed properties last month for a combined $403,924 — about three times the $135,409 it needed to cover what was owed on them. Another 25 parcels drew no bid at all.

One sale stands out. A parcel the borough assesses at $146,019 sold for $12,120, just $101 more than its minimum bid. Whoever owned it walks away from a property on the tax rolls at nearly $150,000 with roughly a hundred dollars.

That gap is the crux of a national argument over how tax foreclosure works. The borough publishes an excess funds list showing proceeds above what was owed, so former owners can claim the surplus — and across this sale, most of the 17 properties brought in well above their minimums, meaning there was surplus to claim. Property-rights groups including the Pacific Legal Foundation argue that systems like this can still strip owners of equity far beyond their debt, particularly when a parcel sells near its floor.

Auction prices run low for reasons that have nothing to do with the borough. The borough doesn't guarantee title, and federal and state liens recorded before the foreclosure stay attached to the property, so a buyer may be taking on debts and defects an assessed value doesn't reflect.

The minimum bids covered back taxes, penalties, interest and foreclosure costs, ranging from about $4,250 to just over $25,400 — the highest attached to a parcel on Nugget Loop. Bidders had to put at least 25 percent down.

The properties were foreclosed over real property taxes delinquent for 2023 or earlier, and the Assembly cleared them for sale in June after finding the borough had no public need for them. The Aug. 28 bid deadline was also the last day former owners could buy their own property back.