Man owed $134 in property taxes. The District sold the lien to an investor who foreclosed

[Catherina]

This man owed $134 in property taxes. The District sold the lien to an investor who foreclosed on his $197,000 house and sold it. He and many others homeowners like him were
Left with nothing.


On the day Bennie Coleman lost his house, the day armed U.S. marshals came to his door and ordered him off the property, he slumped in a folding chair across the street and watched the vestiges of his 76 years hauled to the curb.

Movers carted out his easy chair, his clothes, his television. Next came the things that were closest to his heart: his Marine Corps medals and photographs of his dead wife, Martha. The duplex in Northeast Washington that Coleman bought with cash two decades earlier was emptied and shuttered. By sundown, he had nowhere to go.

All because he didn’t pay a $134 property tax bill.

...

For decades, the District placed liens on properties when homeowners failed to pay their bills, then sold those liens at public auctions to mom-and-pop investors who drew a profit by charging owners interest on top of the tax debt until the money was repaid.

But under the watch of local leaders, the program has morphed into a predatory system of debt collection for well-financed, out-of-town companies that turned $500 delinquencies into $5,000 debts — then foreclosed on homes when families couldn’t pay, a Washington Post investigation found.

...

More: http://www.washingtonpost.com/sf/investigative/2013/09/08/left-with-nothing/

[CaliforniaPeggy]

1. This is fucking disgusting.

It needs to stop.

These people have so little.

How can we leave them with nothing?

[Generic Other]

2. This is the kind of thing that makes me so angry

I see red.

If we treated a senior relative like this, they'd certainly charge us with a crime. The city should be protecting its seniors from such predators.

[R. Daneel Olivaw]

3. So what I want to know is why can't Obama bomb these guys?

They're much more of a menace to the fabric of the USA and affect it more than Assad could ever dream of.

There is an army of unscrupulous individuals, enemy noncombatants if you will, attacking the heart of America and Obama and Congress do nothing.

[AnotherMcIntosh]

14. Since you are changing the subject, it's worth asking: Were those children killed by Obama's drones,

or by someone - whose identity is uncertain - in Syria?

Do you even care about the story covered in the OP? Are you a humanitarian? Or are you just calling special attention to the dead children as a way to call for our military to kill someone or a number of someones?

[Judi Lynn]

16. Shabby idea, wrong impulse deciding to post this photo here.

As I have learned over the years, people do NOT want posters opting to share horrific bits of reality with them without their choice in the matter. Have some respect for the forum, and for the Democrats and democrats who post here. Grow up.

[R. Daneel Olivaw]

41. horrific bits of reality...

The OP covered that quite nicely, and the monsters roam the streets here in the USA.

I'd be you these monsters are dressed in the best that money can buy and look nothing like Assad.

[BlueCheese]

6. Also, why the f--- are private investors collecting public debts?

If there's one task that belongs only to the government, it ought to be tax collection.

I'd also like to find out more about how the homeowners are left with nothing. Shouldn't they at least get the sales proceeds left over after paying the tax debt and the exorbitant, unconscionable fees larded on by these evil pieces of sh-t that foreclosed on them?

[Yes, this story has made me blood-boilingly angry.]

[bvar22]

39. There is more to this story.

There has to be.

[liberalhistorian]

40. That's what I thought and that's what doesn't make

sense to me. I used to be a real estate paralegal and I know that when an entity forecloses on a home, it is only permitted to recoup the amount it's owed plus any reasonable fees and penalties, period. It does NOT "own" the home itself. This is why every single lienholder of a property must be named as defendants in a foreclosure suit, so that they will also receive what is owed them out of the proceeds of the sale. Maybe the owner had other liens on the property that also had to be paid upon the sale of the home? Because there is no way that that investor would be owed $197,000 from just a fucking $134 tax bill. NO. WAY. There's either more to the story or there were other lien holders.

I personally, having seen what I saw in my previous work and hating most foreclosures because of it (the real human cost became too much to bear, all for the sake of the callous greed of lenders/lien holders), do not believe any entity should be permitted to foreclose on a home for any amount less than half of the home's value, period. I've seen homes foreclosed on for a lousy $200 mechanic's lien, with the homeowners getting nothing by the time the mortgages and all other liens were paid, and for various liens of even less than that, and it is BULLSHIT.

[joeglow3]

45. This is an example of where government gets abusive

The government WILL get its money and will fist fuck anyone to get it. We allow bankruptcy to forgive debts...unless it is owed to the government. We want to make sure people pay their property taxes...so we will put their entire house at risk to ensure people pay it.

This side of government is what fuels many loons on the right.

[TheDebbieDee]

54. They've been running infomercials on how to get fabulous properties

for next to nothing since the mid-90s. This is how you get those properties.

You get a listing of properties for which the owners owe back taxes, pay the taxes, get the lien then get the owner to pay you the back taxes plus interest and other charges by a specific date or you take possession of the property.

This method of acquiring property has always been available, just not well-known until the infomercials started in the 90s.

How the people that acquire property this way sleep at night is a mystery to me.......

[davidn3600]

4. This is how it's getting in America and it's tearing the nation apart

It's all about greed now. There is no empathy. There isn't any humanity or dignity anymore.

It's just all about pure greed and exploitation. More and more people have the "I have mine, so fuck you" type of attitude. No one helps each other. No one cares about each other. It's becoming every person for themselves.

In the words of Oscar Wilde:
"Nowadays people know the price of everything, and the value of nothing."

[AAO]

10. Thanks, david

This sums the situation up very well. You hit the nail on the head.

[woo me with science]

33. [phone]

[SammyWinstonJack]

36. This is a rotten country, for sure. nt

[Gemini Cat]

44. +1

But, it's more like... "I have mine, and I'm going to get what you have, and while we're at it... fuck you peasant."
Disgusting.

[RKP5637]

52. America isn't even a country anymore, it's a predatory corporation. No joke,

I am serious. It's basically run like a predatory corporation. Fascism has been completed.

[BlueCheese]

5. I've heard of HOAs who do the same thing.

Foreclose based on petty fines, sell the house, and leave the homeowners with very little. Often they target people who own their homes outright, to get the most out of it.

It's evil. Utterly evil.

[AAO]

9. We need to know about this BEFORE the foreclosure.

I personally would have sent his the $134 if I'd known about this terrible injustice! I may have had to delay my iPhone 5S purchase for a week or two, but what the fuck do I care? This is just so maddening, I could spit. Better than that, I just drooled all over my shirt.

[Chan790]

12. These auctions go on constantly. There's always another person you can help.

To build on your point though, this would be an effective use of a pilot-project similar to Occupy's Rolling Jubilee.

Use the funds of "investors" (you're not investing money for the purpose of financial gain...you're investing in the capacity of the Jubilee to create a more-equitable economic system not founded on a base of debt and predatory capital; your return on investment is a more-equitable economy.) to buy up these tax debts, then forgive the debts.

If the homeowner later gains the ability to pay and wants to, they can put the money they would have owed into the purchase of more tax-liens to keep the Jubilee rolling...though they are of no obligation to do so.

[AAO]

32. Good post. We would all be investing in our future!

The only thing that will ultimately save the world, is empathy, compassion, and the love of people we may never know - but should nonetheless be able care about. It takes a special kind of person not to care.

[Judi Lynn]

17. You're so right. Any number of people would leap to help if they only knew.

Of course, you can bet that's not going to happen as long as businesses stand to make a profit from stealing something so important from the owners just because they can. They'd rather die than give up their opportunity to make some quick cash, and leave some suffering behind for the dispossessed, desperate people.

[StrayKat]

22. Right

I'm sure reading this many people have the same reaction -- they would be willing to pay off or or at least send a small donation to help pay off the bills. There was an accompanying article in the post where AARP said DC has nothing in place to help people once they fall behind. But, I don't see why AARP and other organizations people in this situation tend to turn to for help couldn't at least set up an account on gofundme.org or someplace similar for those struggling with these small bills, esp. the elderly, sick, or otherwise incapacitated.

For that matter, the city could set it up so that payments could be made directly to them by strangers and there would be no confusion about how the money was used or just start a general fund. The gas company allows you to tack on money for those in need. Why couldn't the city do that with taxes, etc?

[AAO]

34. Thinking further.... (look out!)

There really would need to be an non-profit organization that has the infrastructure and financial support to properly research each request. Without that I can see a lot of the "takers", not the focus of this help, taking advantage.

I wish Bill Gates or someone that put 10 million up front to support the idea of compassionate Americans having an avenue to help battle the forces of greed and corruption that are destroying this country.

[cui bono]

43. I was thinking the same thing. I would've sent him the money to save his home.

Bastards.

[Swagman]

11. this is an ugly side of American capitalism at it's most rapacious

and it is nothing but a scam.

In Australia the vast majority of town councils will allow property taxes to accrue and simply charge interest and even allow the debt to last until the debtor dies and then claim it from their estate.

The taxes owed are treated as an asset by the council which is increasing in value with modest interest.

US corporations have seemingly endless ways to screw citizens out of their hard earned assets.

[PowerToThePeople]

20. This sounds very reasonable

A modest interest applied to taxes and taken out of the estate of the deceased.

USA is so wrong.

[hunter]

25. That's the way it ought to work.

There's a lot of corruption here in the U.S.A. hidden behind the legal wallpaper.

[AnotherMcIntosh]

13. It's worth noting that the article is the first of a 3-part series, LIENS, LOSS AND PROFITEERS:

Part 2, to be published tomorrow, will cover "a bid-rigging scheme at Maryland’s tax auctions, some of those same suspects were in the District, engaging in dozens of rounds of unusual bidding."

Part 3, for Tuesday, will cover the hundreds of mistakes made by District tax officials have made "by declaring property owners delinquent even after they paid their taxes, forcing them to fight for their homes."

http://www.washingtonpost.com/sf/investigative/2013/09/08/left-with-nothing/

The 76-year-old Mr. Coleman who struggles with dementia is among those who lost a home for the nonpayment of a small amount of property taxes.

"Tax lien purchasers have foreclosed on nearly 200 houses since 2005 and are now pressing to take 1,200 more, many owned free and clear by families for generations.

Investors also took storefronts, parking lots and vacant land — about 500 properties in all, or an average of one a week. In dozens of cases, the liens were less than $500."

While other cities and States have taken legislative action to curb abuses, there are other examples of abuses in the District of Columbia. Here's just two:

"One 65-year-old flower shop owner lost his Northwest Washington home of 40 years after a company from Florida paid his back taxes — $1,025 — and then took the house through foreclosure while he was in hospice, dying of cancer. A 95-year-old church choir leader lost her family home to a Maryland investor over a tax debt of $44.79 while she was struggling with Alzheimer’s in a nursing home."

Thank you Catherina for the post.

[xchrom]

15. du rec.

[Judi Lynn]

18. So rotten knowing this is happening. How could a sane person want to do this to someone?

That photo is a heartbreaker.

If enough people find out this has been going on, maybe they can move to get something done about it. After all, no one is truly bullet-proof, circumstances could conspire to bring almost anyone to a position, after savage illness, or other unforeseeable, unavoidable problems, wherein he/she suddenly has nowhere to go for help, and nowhere to hide.

Nightmares do come true, and we are NOT masters of our destiny. More people should realize it. I suspect almost everyone will learn it, through simple observation, awareness, given enough time.

[surrealAmerican]

19. Why is it legal ...

... for a municipality to sell off liens to private investors? I understand why a cash-strapped area would want to do this, but it ought not be allowed.

[Buns_of_Fire]

23. The taxing authority wants their money. Where it comes from is of no concern to them.

Google "tax sale auction" and you'll get an idea of how prevalent it is. A while back, there were infomercials boasting on how you could own a $100,000 house for $500, or some such rot. That's how it was done -- with tax lein certificates. After a certain period of time (it varies by state), the owner of the certificate can file for foreclosure of the property, if the lien isn't satisfied -- and the tax certificate is senior to ALL other liens against the property.

Go to a tax sale auction sometime (I've been to one, not as a buyer). It's an interesting view of vulture capitalism.

[xmas74]

21. I knew someone whose mother lost her home this way

over $76. My coworker and her mother hadn't spoken for a few years so she had no idea until she received a phone call. The phone call was about how her mother was on a 72 hour hold, due to some behavior that the sheriff's department felt needed a psych evaluation.

She found out at the regional holding facility, that her mother had dementia and had just had her house taken from her for $76 in back taxes. Everything was dumped out in the front yard and neighbors had actually picked through some of it that hadn't been rained on. No one in the family knew what was going on.

[CrispyQ]

24. I have no words.

[aikoaiko]

26. Sounds like something a Democratic Mayor of DC would want to change.

Connect With Us
1350 Pennsylvania Avenue, NW, Suite 316, Washington, DC 20004
Phone: [phone]
Fax: [phone]
TTY: 711
Email:[e-mail]

[dickthegrouch]

27. I'll never understand

Why the <price_the_bank_sells_it_for> minus 134 is not returned to the homeowner.
Anything else seems like grand theft to me.
If he can prove the foreclosers made tens of thousands in profit, that should be the proceeds of racketeering in collusion with the city and the whole enterprise should be sent to jail.
How about a creative lawyer getting in front of a liberal judge and putting real fear into foreclosure operations?

[BlueCheese]

28. I suspect that part of the article is wrong, somehow.

It seemed so outrageous I spent some time looking it up. I didn't find an answer specific to tax liens in DC, but in other places, the excess amount is indeed returned to the homeowner.

Now, the sales price is often much lower than the market value of the home, because these homes are often sold at auction, so the homeowner may get a lot less than the actual equity in the home. I've also heard of cases where the auctions are won by cronies of the investors, so they get to pocket the difference between market value and sales price.

It's evil all the way around.

[whopis01]

37. It does work that way with a bank

The bank has to give anything over what they were owed to the homeowner. Of course they have no incentive to try to get more than what they are owed.

But this was the government. When it comes to a tax lien, they don't care about the value of the home and will sell it for the taxes owed. Then the investor can own it free and clear and the original owner gets nothing.

[killbotfactory]

42. It's not theft when rich respectable godfearing businesspeople people do it, silly. nt

[discntnt_irny_srcsm]

29. This is a great opportunity...

...to familiarized yourself with the amount of trust to invest in one's government. Anytime the people's steal grip around the neck of the government loosens even a little, the only question is how many individuals will be hurt, disenfranchised, disadvantaged or killed.

Stories like this inspire a Norman Morrison level of trust in government.


We have money to spend everywhere in the world but we just can't let $134 go. John Malone now owns 2.2 million acres and is the nation's No. 1 landlord. I'm guessing Mr Malone has gotten a tax break for $134 at some point. What is it exactly that makes Bennie Coleman less deserving of a break than John Malone?


Maybe we should all just plan for our old age by giving away everything that makes us happy and warehousing ourselves in state run facilities. When the time comes, maybe there will be an employee available to help us end our lives.

[L0oniX]

30. G0d bless Ahmeddicca ...the great satan ...where we feed upon our own. n/t

[csziggy]

31. Tax liens used to be a good deal for small investors

An investor would go to a tax certificate auction and bid on how much interest they would accept in order to pay the taxes for the unpaid year. Since years ago few people were interested, often the interest rates were high and the investor would get a good return - and the county or local taxing authority would get the money they needed to operate.

A property owner who had not paid their taxes for a year usually paid off the lien the next year. It cost them more than just the cost of the outstanding taxes, but the interest rates were not that high. They had to not pau the taxes for years before they were liable to lose their property - I think it was seven years of unpaid taxes before the property could come up for auction, but I'm not sure.

Then there would be a public auction in which anyone, including the original property owner, could bid. The bidding started at the amount needed to cover all the outstanding taxes and liens owed to the local government.

About 20-25 years ago, banks and large investors got involved and bid down the interest rates to the point buying tax liens as investments was no longer profitable. At the same time a Florida man won a court case in which it was determined that tax liens could be discharged in a bankruptcy - before that they were still owed and an obligation that had to be paid before other debts since they were owed to the government.

The large investors and banks began collecting tax liens for the purpose of obtaining the property, not as investments in themselves. Apparently, they have now gotten the laws changed so there is not the years long delay in attempting to claim the property and there is no public auction.

This system as described in the article is not good for communities. The old system allowed property owners time and flexibility in catching up on their obligations to the local government. The amount of the liens was not a lot higher than the property taxes owed, just the taxes and interest that had accumulated. The tax lien owners could not collect the liens directly or attempt to claim the property - it was all done through the government in a publicly accessible method that did not allow piling on additional fees.

[flvegan]

35. DC is fucked up in this regard.

6 months? The article says that the purchasing entity of the tax lien has to go to court to foreclose. I saw three instances of questionable ability to defend, which causes me to wonder what the fuck stands for service of process up there. Dementia, Alzheimers and dying in hospice...where was the court appointed GAL?

I don't know the entire legal process up there, but damn, even Florida makes you look inept in this.

But then...what to expect. The epicenter of corruption wouldn't have it any other way.

[Jefferson23]

38. Yea, and just how exactly did this morph to such hideous proportions?

From the OP: Other cities and states took steps to curb abuses, such as capping the fees, safeguarding houses owned by the elderly or scrapping tax sales altogether and instead collecting the money themselves.


It should be outright illegal to prey on people...beyond disgusting, it should be criminal to do this.

[mahatmakanejeeves]

46. Bookmarking for reference

.

[TeamPooka]

47. K&R!

[Uncle Joe]

48. This is some evil shit.

Thanks for the thread, Catherina.

[47of74]

49. I can barely type without launching into a tirade of obscenities

I created a petition on the White House web site demanding that Mr. Coleman be made whole.

For all the good it will do.

http://wh.gov/l2rke

[Liberal_in_LA]

50. Steve Berman, the greedy pig who took an old sick man's home

Steven Berman, son of a Baltimore banker, swept into the District during the height of the housing boom, flush with money and ready to take on hundreds of bidders at the city’s high-stakes tax lien auction.

From 2005 to 2007, Berman’s companies dominated the bidding room, spending millions to buy the liens placed on properties when owners fall behind on their taxes.

He was a big player at tax lien auctions in Maryland, too, where he was caught in 2007 rigging bids at sales across the state, leading to the largest criminal conspiracy case of its kind at the time.


A Washington Post investigation found that during Berman’s spectacular spending spree in the city, his companies engaged in dozens of rounds of irregular bidding similar to what federal agents had discovered in Maryland.

http://www.washingtonpost.com/sf/investigative/2013/09/09/suspicious-bidding/

http://www.washingtonpost.com/sf/wp-content/themes/wapo-blogs/inc/imrs.php?src=&w=1500

[RKP5637]

51. Subhuman shit hole asses! n/t

[gopiscrap]

53. That is fucked up

this banks should be nationalized and then the houses given back to these poor folks