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.

Image: hud.gov

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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Posted by The NON-Conformist

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