Half the nation’s counties sell property tax bills to debt collectors

December 9, 2013

Local governments around the country are facilitating a practice that, in some cases, allows predatory debt collectors to seize people’s homes.

They do so by selling tax liens—a local government’s right to take a home over unpaid property tax bills—to third parties. In one extreme case, a man lost a nearly $200,000 home over a $134 debt. Last year, about half the nation’s counties put up about 1.6 million such liens for sale, usually to private investors. And those same local governments have done little to protect the homeowners involved, according to a Washington Post investigation.

The Post’s Michael Sallah and Debbie Cenziper—cubicle neighbors to GovBeat—have been documenting the practice in Washington, D.C., in a multipart series. The fourth chapter landed today and, with it, they took a broader look at the practice throughout the country.

“Local governments have been selling liens since at least the 19th century, most often to local investors. Over the past decade, banks, hedge funds and other institutional investors have edged out local buyers, drawn to the possibility of double-digit profit margins,” they write. Few local laws protect against abuse of the practice, they found.

Counties in Florida sold nearly 650,000 such liens last year, well ahead of number-two New Jersey, which sold nearly 155,000. Check out their full story to view an interactive map of the counties that made such sales and to learn more about how little is being done to protect homeowners.

Niraj Chokshi reports for GovBeat, The Post's state and local policy blog.
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Niraj Chokshi · December 9, 2013