How a Man Lost His Home Over a $134 Tax Bill

'Washington Post' investigates world of 'unscrupulous' tax-lien investors
By Kate Seamons,  Newser Staff
Suggested by Mr_Joshua
Posted Sep 9, 2013 12:16 PM CDT
Updated Sep 14, 2013 7:05 AM CDT
How a Man Lost His Home Over a $134 Tax Bill
Bennie Coleman's original property tax bill was for less than three of these.   (Shutterstock)

If the math seems unbelievable, that's because it kind of is: A 76-year-old retired Marine lost the $197,000 Washington, DC, home he had paid for in full 20 years ago—and all of the equity he had in it—because of an unpaid $134 property tax bill. In the first of a three-part series titled "Homes for the Taking," the Washington Post investigates the evolution of a long-running DC lien program. Under it, a lien is slapped on a property belonging to a homeowner who hasn't paid taxes; investors essentially help the city "collect" by buying these liens at auction and charging interest.

But where those investors were once of the "mom-and-pop" variety, they're now "well-financed, out-of-town companies" who charge interest for six months and can then foreclose on the property after that mark if the debt hasn't been paid; they can also slap on thousands in legal fees. The Post has found 509 such instances of foreclosure (about 200 homes, the rest commercial real estate, parking lots, and land) since 2005; in Bennie Coleman's case, his $134 bill grew into a $4,999 debt. And many of the victims are "vulnerable": Coleman is battling dementia; a 95-year-old woman in a nursing home with Alzheimer's lost her home over a $44.79 debt. "This is destroying lives," says an urban real estate professor. Click for the full story, or to read the second part, on suspicious bidding in lien auctions. (More foreclosures stories.)

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