Out-of-state real estate investors can now initiate foreclosures on Washington DC homeowners behind on their taxes. This controversial program leaves people homeless when investors scoop up liens against homeowners.
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.
Tax lien investors have demanded foreclosures on hundreds of homes under this predatory program. Does this seem like a good system?