December 18, 2013

Regarding the Dec. 9 front-page article “Mystery firm buys liens ‘like a machine’ ”:

Real property tax-lien investors such as Aeon Financial provide an invaluable public service by paying taxes that property owners have failed to pay. Cash-strapped cities and counties use this money for vital services such as schools and police. In exchange, investors obtain tax-lien certificates. Because those certificates expire within a short time, it is usually necessary for investors to seek reimbursement through the foreclosure process. Whenever possible, however, my firms work with property owners to resolve any disputes with cities or counties or to allow them to pay their back taxes in installments.

However, as prior Post reporting recognized, the real story in the District is the city’s mismanaged system, which has caused liens to be sold on hundreds of properties for which taxes had been paid or improperly assessed [“D.C. tax office mix-ups put homes in peril,” front page, Sept. 10]. My firms have been urging the District to fix these problems for more than four years. In fact, representatives of Aeon Financial testified before D.C. Council members in 2009 that urgent action was needed because the District’s gross mismanagement of the tax-sale process was placing homeowners at risk. Those concerns were largely ignored, which is why Aeon stopped investing in the District.

It was only after Aeon was forced to file suit against the District in 2009 to comply with the tax-sale statute that the District began to complain about Aeon’s attorney fees — primarily because it is required by law to pay such fees whenever it cancels a sale for administrative errors.

Finally, all tax-lien foreclosures are judicial proceedings in which property owners are free to challenge any legal fees they believe are unreasonable. We have confidence that this process ensures due process and fairness. Enforcing liens for unpaid property taxes is arduous and expensive, which is exactly why so many cities and counties sell certificates to private companies and investors rather than collect unpaid property taxes themselves.

Mark A. Schwartz, Chicago

The writer is owner and chief executive of Axis Capital Management and is grantor and trustee of the Axis Investment Holdings Trust, which owns and manages Aeon Financial. He is also a beneficiary of the trust.