Washington DC officials have set up a controversial program that allows out-of-state investors to initiate foreclosures against homeowners who have fallen behind on their taxes, in some cases for just hundreds of dollars.
The District of Columbia for many years placed liens – a means of debt security – on properties when homeowners failed to pay their taxes. Those liens were then sold at public auctions to investors who were able to make a profit by charging the homeowners interest on top of the tax debt until the total bill was repaid.
The program, however, has turned into a “predatory system of debt collection for well-financed, out-of-town companies that turned $500 delinquencies into $5,000 debts,” an in-depth Washington Post investigation reported.
In many cases, homeowners were left homeless after a foreclosure was placed on their residences.
The paper relayed the story of Bennie Coleman, 76, a decorated veteran of the Marine Corps, who was forced out of his $197,000 house by US Marshals as movers cleared out his home of all his worldly possessions.
The reason for Coleman’s eviction: He was unable to foot the bill for $134 in property tax.
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