But both Gray and council members were warned 16 months ago in a letter from a coalition of community advocates and law firms that the District’s collection system deprived homeowners of fair treatment and due process.
The Post found that the District’s Office of the Chief Financial Officer had for years recovered outstanding tax debts by selling liens on resident’s delinquencies to investors. Some of those investors engaged in a predatory system of debt collection that used legal fees and interest to turn $500 in late payments into $5,000 debts.
The practice has allowed investors to foreclose on nearly 200 houses since 2005; lien holders are in the process of seeking control of 1,200 more.
At a news conference Monday morning, Gray said he reacted with “anger and outrage” to the story of Bennie Coleman, a 76-year-old ex-Marine who lost his home after a $134 delinquent tax bill was sold at auction. “That is absolutely unconscionable, and we cannot allow those kinds of things to happen again,” Gray said. “We’re going to stop this. People are not going to lose their homes as a result of something like this.”
D.C. Council member Jack Evans (D-Ward 2), chairman of the finance and revenue committee and a candidate for mayor, said he was “outraged” by the stories. He said he would introduce emergency legislation at next week’s council meeting that would place new curbs on tax lien sales to protect vulnerable residents.
The pledges come after the Alliance to Help Owners Maintain Equity (AT HOME) warned in an April 2012 letter that “[t]he current tax sale system deprives affected homeowners, many of whom are elderly or economically disadvantaged, of fair treatment, including constitutional protections.”
The missive prompted a June response from the tax office, which said it would issue post-sale notices for the first time, but did not address other suggested reforms.
Neither Gray nor Evans responded, said Amy Mix, an attorney for the AARP-affiliated Legal Counsel for the Elderly and an AT HOME affiliate. Pedro Ribeiro, a spokesman for Gray, said the group’s letter was forwarded directly to the tax office.
After testifying before Evans’s committee in October, Mix and other advocates were invited to meet top finance officials, including Natwar M. Gandhi, the District’s outgoing chief financial officer, who manages the tax office. At the meeting, Gandhi described a new advisory board on residential property tax issues.
Mix said she has not been contacted since about serving on the board or participating in its work. David Umansky, a spokesman for Gandhi, said the Residential Tax Advisory Council has met twice since then but has focused on concerns not related to the lien sales.