While foreclosure abuses have been front-page news since the 2007 housing market crash, there has been another foreclosure crisis brewing in the District that has garnered little attention, until now. In a three part series, Washington Post journalist Michael Sallah, a Pulitzer Prize-winning investigative reporter and editor, details how the District’s tax lien system has “morphed into a predatory system of debt collection for well-financed, out of town companies that turned $500 delinquencies into $5,000 debt—then foreclosed on homes when families couldn’t pay.”
The first article in the series describes how District government has done virtually nothing to shield vulnerable homeowners from unscrupulous investors and in some cases compounded the problem by erroneously calculating interest and selling property tax liens even when homeowners were current on their taxes. Part 2 details investors’ apparent bid-rigging, practices that caused Maryland officials to bring criminal conspiracy charges against one DC investor that resulted in his eventual guilty plea. The District’s tax office “acknowledged that the agency never went back to review the bidding in the District for signs of wrongdoing after the Maryland criminal case became public.”
Even though the last article in the series detailing how District tax officials miscalculated taxes and mischaracterized property owners as delinquent had not yet gone to print, Mayor Gray called a news conference yesterday to express his shock and outrage and promising to introduce emergency legislation to protect vulnerable residents. As one of the organizations that has been supporting reform of the District’s tax foreclosure program, Legal Aid looks forward to, in Mayor Gray’s words, having the District taking a more “benevolent and humanitarian” approach to low income homeowners.